The Income Tax Settlement Commission (ITSC) has admitted that, in the last five years, no case has been disposed by it as quickly as the one of Sahara India. And that, in what is a departure from procedure, it did not seek any inquiry from the Income Tax Department for which it had a 90-day period.
In a reply to an application filed by The Indian Express under the Right to Information Act, the ITSC confirmed the report published in the newspaper (January 5, 2017) on the unusual haste shown in the Sahara India case. In its reply dated January 11, 2017, the ITSC said: “Sahara India is one of the quickest disposal of an application by ITSC. During the last 5 years no case has been disposed within the similar time frame.’’
WATCH VIDEO | Income Tax Panel Admits Sahara Fastest Disposal In 5 Years
The ITSC granted Sahara India immunity from prosecution and penalty following raids conducted on November 2014 during which “diaries” listing alleged pay-offs to politicians were recovered. Significantly, the ITSC concurred with Sahara’s claim that the “evidentiary value” of the “loose sheets” recovered during the raids “could not be proved” by the Income Tax Department.
The RTI reply, incidentally, came the day the Supreme Court dismissed a PIL seeking further investigation into the recovery of the Sahara diaries. The apex court called the documents recovered during a raid in November 2014 on Sahara India as “inadmissible and loose” but arguing against the PIL, Attorney General Mukul Rohatgi told the court that now it was for the Income Tax Department to decide whether it was “proper” for them to challenge the Settlement Commission order or not.
Section 260A of the Income Tax Act gives the Department a 120-day window to file an appeal before a High Court in case it is “aggrieved” by an order passed by any Appellate Tribunal, including the Settlement Commission. The ITSC has now provided in its RTI reply, the date-wise processing of the Sahara case, admitting that it has an 18-month timeframe to settle a case under various sections of the Income Tax Act.
In the case of Sahara India, the case was admitted before the ITSC (after it was denied admission once) on September 5, 2016 and with great speed, a final order was passed on November 11, 2016.
The details provided by the ITSC show:
* A copy of the admission of the application was provided to the company the same day, that is September 9, 2016
* Receipt of report from the PCIT (Principal Commissioner Income Tax) under Section 245D (2B) for which a 30-day period is granted, was received in 11 days, that is on September 20, 2016.
* The next stage is Section 245D (2C) for which a 15-day period is outlined, but in this case, the oder, declaring the company’s application as valid was ready in just two days, that is September 22, 2016.
* The most crucial admission of the ITSC in its RTI reply is the “NIL” it has marked against the process under Section 245D(3) of the Income Tax Act. Under this Section, ITSC is given 90 days to call for records of the case from the PCIT or direct him to make further inquiries and investigations in the case.
This cucial part of the appellate procedure was done away with in a case where the IT’s appraisal report and annexures run into thousands of pages. With no further probe or inquiry sought under this Section, the ITSC has admitted, a final order was passed by them on November 10, 2016.
The final page of the order states that only Rs 137.58 crore “which was seized during the raids” will now be taxed, which too can be paid by the company in 12 instalments. The order mentions that Sahara had claimed it was passing through “difficult times” and wanted to pay the tax and penalty in instalments.