2021 (3) TMI 1450 - HC - Income Tax

Pronouncement of decision after completion of hearing by Settlement Commission - Text of the order un/s 245D(4) was pending to be issued which has not been done till date - petitioners have in effect prayed for the writ of mandamus commanding the respondent No.1 to pass an order under section 245D(4) of the Income Tax Act, 1961 in accordance with law - HELD THAT - We dispose of this petition with the direction to the respondent No.1- Settlement Commission to consider the facts as stated by the petitioner and as recorded in the above order and if they are found to be correct, it may proceed to pass/issue appropriate formal orders on or before 31.03.2021 and if such facts are not found to be correct, the Commission would be free to proceed in accordance with law in its own wisdom and discretion.

Summary

Issues:
Petition for writ of mandamus under Article 226 to compel the Settlement Commission to issue order under section 245D(4) of the Income Tax Act, 1961.

Analysis:
The petitioners sought a writ of mandamus to compel the respondent No.1, the Settlement Commission, to issue an order under section 245D(4) of the Income Tax Act, 1961. The petitioners contended that after filing for settlement and completion of proceedings and arguments, the case was declared settled by the respondent No.1, but the formal order under section 245D(4) was still pending as of the date of the petition. The petitioners argued that the issuance of the formal order was a procedural requirement and not substantive adjudication, and therefore, it should not be stalled by subsequent amendments. The petitioners prayed for the issuance of an appropriate mandamus to the Settlement Commission to issue the formal orders.

In response, the respondent No.2, the Assistant Commissioner of Income Tax, submitted that the verification of facts stated by the petitioners should be left to the discretion of the Settlement Commission. The respondent No.2 referred to the Finance Bill 2020-21 and its provisions, highlighting that the bill had not been enacted yet. The respondent No.2 emphasized that the Settlement Commission should decide on the correctness of the facts presented by the petitioners before proceeding further.

The High Court disposed of the petition by directing the Settlement Commission to consider the facts presented by the petitioners and recorded in the order. If the facts were found to be correct, the Commission was instructed to pass or issue appropriate formal orders by a specified date. However, if the facts were deemed incorrect, the Commission was given the discretion to proceed in accordance with the law. The court permitted direct service of the order.