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2014 (4) TMI 1275 - SCH - Income TaxDispute between Income tax department and statutory Board under the provisions of Chandigarh Administration - Payment of tax by the Chandigarh Housing Board to the Income Tax Department - HELD THAT - A sum of ₹ 278 crores, which was deposited by the Chandigarh Housing Board in the Government treasury, is agreed to be adjusted in Income Tax head and it is treated as final insofar as liability of Income Tax is concerned. Having regard to the settlement reached between the parties, it is clear that the dispute regarding payment of tax by the Chandigarh Housing Board to the Income Tax Department stands resolved. It is further agreed that no penalty proceeding would be initiated against the Chandigarh Housing Board. However, it is also stated that the decision in this regard can further be taken only by the competent Income Tax authority.
Issues:
Interim order challenge - Special leave petition against interim order dated 07.05.2012 passed by the High Court in ITA No.41/12. Settlement agreement - Discussion of an amicable settlement between the Income Tax Department and the Chandigarh Housing Board. Liability adjustment - Agreement to adjust a sum of Rs. 278 crores deposited by the Chandigarh Housing Board in the Government treasury in the Income Tax head. Penalty proceedings - Agreement not to initiate penalty proceedings against the Chandigarh Housing Board. Competent authority decision - Decision regarding penalty proceedings left to the competent Income Tax authority. High Court disposal - Parties to approach the High Court for disposal of the pending ITA. Interim Order Challenge: The Supreme Court disposed of a special leave petition filed against an interim order dated 07.05.2012 passed by the High Court in ITA No.41/12. The matter involved a dispute between the Income Tax Department and the Chandigarh Housing Board, a statutory Board under the provisions of Chandigarh Administration. Settlement Agreement: There was a discussion regarding an amicable settlement of the dispute between the Income Tax Department and the Chandigarh Housing Board. A 'Record of Discussion' held on 14.05.2013 was placed on record in I.A.No.2 of 2014. It was agreed that a sum of Rs. 278 crores, deposited by the Chandigarh Housing Board in the Government treasury, would be adjusted in the Income Tax head, resolving the liability of the Chandigarh Housing Board towards Income Tax Department. Liability Adjustment: The settlement reached between the parties confirmed the adjustment of the deposited amount in the Income Tax head, finalizing the liability of the Chandigarh Housing Board. The agreement also specified that no penalty proceedings would be initiated against the Chandigarh Housing Board. However, the decision on this matter was left to the competent Income Tax authority. Competent Authority Decision: The competent Income Tax authority was entrusted with the decision-making process regarding the initiation of penalty proceedings against the Chandigarh Housing Board. It was emphasized that the authority should consider the spirit of the agreement reached in the 'Record of Discussions'. High Court Disposal: As part of the resolution, the parties were directed to approach the High Court for the disposal of the pending ITA. Following the settlement and resolution of the issues, the Supreme Court disposed of the special leave petition and I.A. No. 2 of 2014.
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