2011 (9) TMI 159 - HC - Income Tax

Order of settlement commission u/s 245D - charge of interest u/s 234B / 234C - condonation of delay - the time gap between the date of the impugned order and filing of the petition - Held that - though there is no fixed or rigid time limit for approaching a court for a writ under Article 226 of the Constitution of India for a writ of certiorari, such approach must be made within a reasonable period of time. What is the reasonable period must depend on circumstances of each case. - It is equally well settled that a person who has not agitated an issue or having agitated at the first stage and thereafter not pursued further legal remedy, cannot revive a stale claim only on the ground that under similar circumstances in favour of some other person the High Court or Supreme Court has ruled otherwise. Ordinarily, when the law is stated by the Apex Court, by virtue of Article 141 of the Constitution, it becomes law of the land and is applicable to all pending cases or the cases which may arise thereafter. However, judgement or a decision not made applicable prospectively would not mean that the issues long closed, rights foregone years or decades back can be reopened, re-agitated or reclaimed on the basis of such decisions of the Apex Court. After more than four and half years of the order of the Settlement Commission, which the petitioners never challenged in the interregnum must be held to be belated. - Decided against the assessee.

Summary

Issues Involved:
1. Legality of charging interest under Sections 234B and 234C of the Income Tax Act, 1961, up to the date of order under Section 245D(4) by the Settlement Commission.
2. Timeliness and delay in filing the writ petition challenging the Settlement Commission's order.
3. Application of the Supreme Court's decision in Brijlal and others (2010) 328 ITR 477.

Issue-wise Detailed Analysis:

1. Legality of Charging Interest under Sections 234B and 234C:
The petitioner, an income tax assessee, challenged the interest charged by the Settlement Commission under Sections 234B and 234C of the Income Tax Act, 1961, up to the date of the order under Section 245D(4). The Settlement Commission had charged interest based on the decisions of the Apex Court in Hindustan Bulk Carriers (259 ITR 449), Damani Brothers (254 ITR 91), and Anjuman Mohammed Hussein Ghaswala and others (252 ITR 1). The petitioner accepted this order and paid the interest without protest. The petitioner later based his challenge on the Supreme Court's decision in Brijlal and others (2010) 328 ITR 477, which held that interest under Sections 234B and 234C should only be charged up to the date of the order under Section 245D(1) and not up to the date of the order under Section 245D(4).

2. Timeliness and Delay in Filing the Writ Petition:
The petition was filed on 14th September 2011, challenging the Settlement Commission's order dated 26th March 2007. The petitioner did not challenge the order for over four years and paid the interest as directed without any protest. The court noted that a writ petition under Article 226 of the Constitution of India is not governed by a rigid law of limitation, but delay and laches are significant factors. The petitioner explained the delay by stating that the law was settled recently by the Supreme Court in Brijlal and others (supra). However, the court held that even with the subsequent decision of the Apex Court, writ jurisdiction cannot be invoked after an indefinite period.

3. Application of the Supreme Court's Decision in Brijlal and Others:
The petitioner argued that the decision in Brijlal and others should benefit him retrospectively. The court, however, noted that the principle of prospective overruling was not applicable in this case. The court emphasized that the decision in Brijlal and others did not open the door for revisiting settled matters after an extended period. The court referred to several judgments, including Banda Development Authority v. Moti Lal Agarwal and others (2011) 5 SCC 394, Shankara Cooperative Housing Society Limited v. M. Prabhakar and others (2011) 5 SCC 607, and others, which established that delay and laches could bar relief under Article 226.

Conclusion:
The court dismissed the petitions, holding that the petitioner could not reopen the issue long settled by the Settlement Commission's order. The court emphasized the importance of timeliness in seeking judicial review and the principle that a decision in another case does not automatically reopen settled matters for others. The court reiterated that the law laid down by the Supreme Court in Brijlal and others could not be applied retrospectively to unsettle closed matters.