(1.) THIS judgment will dispose of two appeals Nos. 41-D and 42-D of 1955 under Clause 10 of the Letters Patent from the judgment, dated August 22, 1955, of a learned Single Judge of this court.
(2.) ON May 15, 1948, the Central Government referred to the Commission under Section 5 of the taxation on Income (Investigation Commission) Act, 1947 (Act No. XXX of 1947), for investigation and report of the cases of Raghunandan Saran and Raghbir Saran, two real brothers, in connection with evasion of payment of tax on income by them. The Commission entered into an investigation and during the investigation Raghbir Saran was examined and he made certain disclosures about concealed income but his statement was not satisfactory and before it could be concluded, the auditor representative on behalf of the two brothers stated to the Commission that "his clients desired to be spared further interrogation and would make a fuller disclosure which might be more acceptable to the Commission. " accordingly disclosures were made by the two brothers to the Commission, but the Commission was not satisfied with the disclosures. At the same time it accepted a settlement to which the two brothers were agreeable whereunder the two brothers were to pay income-tax on a sum of Rs. 15. 00. 000/- for evasion of taxation between April 1, 1940, and March 31, 1948. The commission made its report on December 9, 1950, and also forwarded the terms of settlement to the Central Government. The settlement was accepted by the Central Government and on the basis of that tax was levied on the said amount stated in the settlement.
(3.) IN the terms and conditions of the settlement are mentioned in paras Nos. 6 to 9 certain other items of concealed income that were discovered by the Commission and some of those items are of dates after March 31, 1948. But among those items are not the three items of (a ). Rs. 1,49,906/47-shown as loan from Begum Zafar Ali Khan of Rampur and (b) Rs. 1,00,000/- shown as deposit in the name of Begum Rampur in the account books of Raghunandan Saran, and (c)Rs. 49. 968/12/- shown in the account books of Raghubir Saran as a loan taken from Betum Zaidi of Rampur. The date of the first and the last items is August 9, 1948, and of the second item is april 8, 1948. These arc the items in dispute in these appeals. Clause 10 of the settlement is : "it is agreed by all the parties aforesaid, viz. , Raghbir Saran, Raghunandan Saran, Messrs Piara lal and sons, Limited, Messrs. Saran Motors Ltd. , and Messrs. Ghaziabad Engineering Company ltd. , that the inclusion of the different items of concealed income in the several assessments or reassessments, as provided for in Clause. 6, 7 (a), 7 (b), 8 and 9 hereof, shall be without prejudice to the right of the Income-tax Department to include in the relevant assessments or reassessments any other item of income that they may discover either under the specific heads mentioned above or any other head, in addition to the items of income already disclosed and mentioned in the several clauses referred to above, or further items that may be disclosed by the parties concerned in tile revised returns, if any, that may be filed by them in the assessments or reassessments concerned". After stating that the two brothers Raghbir Saran and Raghunandan Saran has agreed to comply with the terms and conditions of the settlement, in Clause 11 a proviso was added to this clause, which reads -"provided, however, and the same is agreed to by each and all of the five assessees mentioned above, that they or either of them shall not be entitled to any immunity whatsoever in respect of any further item of undisclosed income which the Income-tax Officer may be able to discover and which he may include in the relevant assessments, or reassessments and that to such items of concealed income discovered and included by the Income-tax Officer in the assessable income for the relevant assessments or reassessments the ordinary law as to tax, penalty and prosecution shall apply". Clause 10 of the settlement refers to specific items as provided for in Clause 6, 7 (a), 7 (b), 8 and 9 of the settlement and not one of those relates to the three items in dispute. It has already been pointed out that there is no reference at all to any of those three items in any part of the settlement.;