Section 245D(2C) of Income Tax Act, 1961 – Settlement Commission – Question of full and true disclosure and the discharge of tax liability at all stages prior to final hearing, should be seen only in the context of the issues offered for settlement and the remittances of additional tax thereupon.

Facts: Assessee filed a writ petition challenging the order of Settlement Commission in which applicant raised the question that "Whether the Applicant is taxable in India on account of income earned from offshore supply of goods?"

Held, that question of full and true disclosure and the discharge of tax liability at all stages prior to final hearing, should be seen only in the context of the issues offered for settlement and the remittances of additional tax thereupon. Issues decided by the Commission and liability arising there from, will be payable only at the stage of such determination, which, in my considered view, is the stage of final hearing under Section 245D(4). Commissioner reiterates the stand of the Revenue in the draft assessment order to the effect that the division of the contract between offshore and onshore components is but an artificial bifurcation, and the contract is composite, liable to be construed as one whole, with the entirety of the income being offered to tax in India. This Writ Petition is allowed – HITACHI POWER EUROPE GMBH Vs. ITSC [2020] 423 ITR 472 (MAD)