2016 (12) TMI 1613 - HC - Income Tax

Deceleration of Rule 29(2) of the Income Tax Rule 1962 as ultra vires - Trustees should be removed and the Association should be allowed to run the said Company and that suit was decreed - Both the parties have settled the matter amicably before the Mediation Centre - Held that - Considering the submission advanced by the learned advocates and after perusing the record I am of the view that justice would be sub-served if the respondent no.2, the Commissioner of Income Tax, Kolkata III is directed to consider and dispose of the representation made by the Association dated 31st August, 2016 appearing at page 64 of the writ petition as well as the representation made on 30th Semptember, 2016 by the petitioner No.1 and respondent no.3 after giving an opportunity of hearing to the parties or their authorized representatives within three weeks from the date of communication of this order and thereafter communicate the decision to the parties within one week. Needless to mention that the money which has already been deposited by the respondent no.3 pursuant to the Court s order will be utilized by the respondent no.3 in terms of the settlement which has been approved by the Hon ble Karnataka High Court.

Summary

Issues:
Challenge to impugned notice dated 11th April, 2007 and Rule 29(2) of the Income Tax Rule 1962 as ultra vires.

Analysis:
The petitioner filed a writ petition challenging the impugned notice dated 11th April, 2007 and sought a declaration that Rule 29(2) of the Income Tax Rule 1962 is ultra vires. The petitioner's advocate informed the court that they are not pressing one of the prayers of the original writ petition. It was highlighted that respondent no.3 had already deposited a substantial amount in fixed deposit as per the court's order. Additionally, it was mentioned that during the pendency of the writ petition, former employees/pensioners formed an association and filed a civil suit against the company, which was decreed. Both the petitioner and respondent no.3 appealed to the Karnataka High Court, which referred the matter to mediation. The parties settled the matter amicably before the Mediation Centre, and the settlement was approved by the Karnataka High Court. The petitioner then requested implementation of the settlement, which was not disputed by the authorities or other respondents.

The court, after considering the submissions and records, directed the Commissioner of Income Tax, Kolkata-III to consider and dispose of the representations made by the Association and the petitioners within a specified timeframe after providing an opportunity for a hearing. It was clarified that the money deposited by respondent no.3 was to be utilized according to the approved settlement. The court explicitly stated that it did not delve into the merits of the case, leaving all points open to be decided independently by the Commissioner of Income Tax, Kolkata-III. The writ petition was disposed of based on these directions, and consequently, the related application was also disposed of. No costs were awarded, and certified copies of the order were to be provided to the advocates upon request.