Admissibility Of Applications Under Sections 245D(1)
(Allowing Applications To Be Proceeded With)

Shri Satyendra Pal Chaudhary
F No 6/2/206/83-IT

ITSC Mumbai
Date of Order 16.09.1985

(a) In a case where the CIT objected to the application u/s 245C(1) on the ground that the books of account and other documents seized during the course of search are clearly indicative of concealment of income and since evidence was available in the seized material, it was a case of simple concealment and was thus not 'complex' and 'complicated'. 
It was held by the Commission that this is a sheer-over simiplification of the matter.

(b) Where the assessee had filed an application u/s 273A of the Income Tax Act before the CIT to settle the case to buy peace the CIT's objection that since the assessee had filed an application u/s 273A he has admittedly concealed the particulars of his income. 
It was held by the Commission that the question whether the assessee has concealed the particulars of his income had to be decided on the basis of the evidence collected by the Income tax authorities without relying on applicant's offer made with a view to buying peace or avoiding litigation.

(c) Explanation to section 276C, which, in terms, applies only in relation to the section, cannot be invoked for the purpose of interpreting section 245D.

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Shri Sushil Kumar Pansari
F No 4/8/112/83-IT

 ITSC Delhi
Order dated 20.01.1986

The complexity of investigation depends upon the facts and circumstances of each case. In a case, where applicant was one of the partners of a firm in which case several books of account, documents and papers etc. were seized during the course of a search u/s 132 and the case of the firm was allowed to be proceeded with, the CIT's objection that there was no complexity of investigation involved in the partners' case was not accepted and the partners' cases were allowed to be proceeded with on the ground that a proper settlement of the income tax cases of the said firm would involve the simultaneous settlement of the income tax cases of all its partners.

M/s Gupta Dal & General Mills, Bhiwani
F No 8A/1/37 & 40/83/IT

ITSC Mumbai
Date of Order 9.3.1987

Where the department was able to obtain u/s 132A duplicate books of accounts from the Sales Tax authorities which had never been intended by the applicant to be produced before the department and which were put across to him by the ITO and the applicant at no stage said that the books of account did not relate to it, on the contrary, the applicant gave various explanations regarding the items appearing in the seized books which apart from uncovering of unrecorded assets, also showed specific items of undisclosed income, the application of the assesses u/s 245C was rejected.

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Rohit Puri /Sunil Puri
S.A.No. 5/IX/54/91-92/IT 
S.A.No. 5/IX/53/91-92/IT

ITSC Mumbai
Order dt. 27.01.1993
74 Taxman 306 
117 Taxtion 420

The applicants assessments were completed in 1988. In December 1991 search of his brother's locker revealed, besides jewellery and cash, some documents relating to gifts claimed to have been received from certain relatives of applicants' NRI sources. In the statement u/s 131 applicants' brother claimed that gifts worth Rs 3,11,000/- were obtained against payment in cash by the applicant. Thereupon the applicant filed SA and surrendered the amounts. Whether such SA was admissible u/s 245C.

Addl Bench, Mumbai held : YES. and admitted the application.

The CIT maintained that no complexity was involved in the case. But AR for the applicant submitted that the undisclosed money had become available through property deals unknown to the Dept. which were very difficult to prove. Hence complexity involved.

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M/s Dodsal Ltd
SA No 5/V/020/92-93/IT

ITSC Mumbai
Order dated 15.12.92 
68 Taxman 258

For assessment year 1989-90 and 1990-91 the applicant made purchases to the tune of Rs 8.31 crore from 33 parties. AO called for details of 11 parties (involving Rs 83.43 lakh), who could not be produced. Applicant offered to surrender 1.5 crore on agreed basis. But AO disallowed the entire amount of 8.31 crore. Whether applicants' offer in settlement, amount exceeding Rs 1.5 crore could be accepted by admitting the petition.

Held : YES.

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Shri Sudhir Kumar Paliwal
SA No 8/26/95/3-IT

ITSC Delhi
Order dated 11.9.95
95 Taxman 446

During search cash, jewellery etc was seized. Applicant sought settlement during the pendency of petition u/s 132(11). Contended that there was complexity in case as sources of investments could not be proved in the absence of proper accounts. A fresh offer of additional income over and above the returned income was made by applicant. Whether admission was justified.

Held : YES : on facts of the case.

Mrs. Chandrakanta Singh
S.A.No. 5/I/013/98-99/IT

ITSC Mumbai
Order dt. 29.01.1999

In this case the applicant had claimed an expenditure of Rs. 45 lakh in respect of payment to Shri Nirajan Singh, her son, out of property income. Eventually, the claim was withdrawn and the amount of Rs. 45 lakh was offered as additional income.

The admission in this case was rejected on the grounds that mere withdrawal of claim of deduction did not constitute "disclosure of additional income" before the Commission. Also, there was no complexity of investigation involved in calculation of property income only.

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M/s Super Bakers (India)
SA No 10/III/012/99-2000/IT 

ITSC Mumbai
Order dated 17.05.2000

The applicant was partnership firm consisting of four partners. Action u/s 132 was carried out at the business premises of the applicants as also their sister concerns which had not filed any application for settlement. Proceedings under Chapter XIV-B were concluded determining substantial unaccounted income. The applicant was alleged to have suppressed sales of under reported daily cash which according to the CIT amounted to Rs 4.6 Crores. There were voluminious seized records and possibility of prolonged litigation from the high pitched assessments. The case was allowed to be proceeded with on the grounds that it involve substantially complex and careful investigation, and the nature and circumstances were such that finalisation of the case by normal processing might entail prolonged litigation. There were manually written sales slips which had to be co-related with the registers. The disclosure was to be taken to be true and full until found otherwise on investigation. Accordingly, the applications were admitted and allowed to be proceeded with.

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M/s Electrotherm India Ltd
SA No 10/I/056/96-97/IT

ITSC Mumbai
Order dated 10.06.1999

Search and seizure operations were carried out on the applicants and their sister concerns and the individuals involved in this group. The department was of the view that the applicants were indulging in the practice of bogus purchases and inflating the manufacturing losses. Income so suppressed was being utilised in showing non-genuine advances and deposits in the names of customers and associates. Funds so diverted from the company were given to Shri P.B.Shah, who acted as a broker in purchase of lands for the company and the payment of on money for such transactions. Undisclosed income was estimated in crores. The applicants admission u/s 132(4) was subsequently retracted. The CIT in his report had accepted that complex issues were involved in this case. It was observed that exact details on unaccounted income were not available and the finality of assessments was in dispute. After the filing of the Settlement Applications, the CIT(A) completed the appeals. The applicant went in further appeal to ITAT which was also decided and both, the applicants and the department appealed to High Court of Gujarat. The Settlement application was admitted on the basis that the ultimate fate of the assessments was uncertain and it could not be said by any degree of certainty that the additional income disclosed before the Commission would be eventually covered by the total income. Accordingly , the applications were allowed to be proceeded with.

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