2016 (4) TMI 1202 - HC - Income Tax

Arbitrary Cut-off Date - Settlement commission - Validity of Sections 245 HA(1)(iv) and 245HA(3)- Time Limit for settlement of cases under Income Tax Held that - It is admitted by both the parties that the issue raised and decided by the Bombay High Court in Star Television News Limited Versus UOI 2009 (8) TMI 86 - BOMBAY HIGH COURT was challenged before the Apex Court (2015 (4) TMI 19 - SUPREME COURT) and the Apex Court approved the judgment of the Bombay High Court in said case reported above Fixing the cutoff date as 31st March 2008 was arbitrary the provisions of Section 245HA(1)(iv) to that extent will be also arbitrary. Also held that it is possible to read down the provisions of Section 245HA(1)(iv) in the manner set out earlier. This recourse has been taken in order to avoid holding the provisions as unconstitutional. Having so read we would have to read Section 245HA(1)(iv) to mean that in the event the application could not be disposed of for any reasons attributable on the part of the applicant who has made an application under Section 245C. Consequently only such proceedings would abate under Section 245HA(1)(iv). Considering the above the Settlement Commissioner to consider whether the proceedings had been delayed on account of any reason - No interference in HC judgment required - Appeal of Union of India dismissed.

Summary

Issues involved:
1. Interpretation of Section 245HA(1)(iv) in light of the judgment of the Apex Court in Union of India Vs. Star Television News Ltd.
2. Determination of the impact of delay on proceedings before the Settlement Commission.
3. Mandate for the Settlement Commission to complete proceedings within a specified timeframe.

Analysis:

1. The judgment addresses the interpretation of Section 245HA(1)(iv) in the context of the decision in Union of India Vs. Star Television News Ltd. The court refers to the judgment of the Bombay High Court, which was subsequently upheld by the Apex Court. The court emphasizes the need to avoid arbitrariness in fixing cut-off dates and provides guidance on reading down the provisions of the section to prevent unconstitutionality. The Settlement Commission is directed to assess delays in proceedings based on reasons attributable to the applicant and proceed accordingly.

2. The court quotes Para 59 of the Bombay High Court judgment, highlighting the importance of considering delays in proceedings before the Settlement Commission. It instructs the Commission to determine if any delays were due to reasons attributable to the applicant. If not, the Commission is mandated to proceed with the application as if not abated. The judgment underscores the significance of prompt disposal of pending applications, suggesting the appointment of additional Benches for efficient handling, particularly in areas with heavy caseloads like Delhi and Mumbai.

3. In conclusion, the court orders that the writ petitions are to be governed by the judgment in the aforementioned case. The Settlement Commission is directed to address delays promptly and complete proceedings within six months from the date of receipt of the court's order. The writ petitions are thereby disposed of, emphasizing the importance of timely resolution of matters before the Commission to ensure effective administration of justice.