2017 (1) TMI 1147 - SC - Income Tax

Immunity from prosecution under Section 245H (1A) - Held that - It is not in dispute that all payments have been made before the appellant approached this Court and filed this appeal by way of special leave petition on 20.01.2016, though the time originally granted by the Settlement Commissioner was only up to 31.07.2015. However, we find from the provision that the Settlement Commissioner is free to grant further time for payment, under Section 245H(1A) of the said Act. Having heard the learned senior counsel for the appellant and learned Additional Solicitor General appearing for the respondents, we are of the view that in the facts and circumstances of this case, it is not necessary to relegate the appellant to the Settlement Commissioner for enlargement of time, since the payments have already been made. Therefore, for all intents and purposes it shall be taken that the appellant has made the payments within the time granted under Section 245H(1A) of the said Act.The appeal is allowed, as above. HC ref case - 2015 (12) TMI 201 - PUNJAB AND HARYANA HIGH COURT

Summary

Issues: Immunity from prosecution under Section 245H(1A) of the Income Tax Act, 1961.

In this judgment by the Supreme Court, the main issue concerns the immunity from prosecution under Section 245H(1A) of the Income Tax Act, 1961. The provision states that if a person fails to pay any sum specified in the settlement order within the specified time or fails to comply with conditions, the immunity granted shall be withdrawn. The appellant in this case did not make payments within the time granted by the Settlement Commissioner but made all payments before approaching the Court. The provision allows the Settlement Commissioner to grant further time for payment. The Court, after hearing both parties, decided that since the payments were made before the appeal was filed, it is not necessary to send the appellant back to the Settlement Commissioner for an extension of time. Therefore, it was concluded that the appellant made the payments within the time granted under Section 245H(1A) of the Act, and the appeal was allowed with no order as to costs.

This judgment clarifies the interpretation and application of Section 245H(1A) of the Income Tax Act, 1961, regarding the immunity from prosecution. It emphasizes that compliance with payment timelines and conditions is crucial for maintaining immunity. The Court highlighted that although the appellant missed the original payment deadline, making all payments before filing the appeal sufficed to meet the requirements of the provision. The discretion of the Settlement Commissioner to grant further time for payment was also acknowledged. The decision underscores the importance of timely compliance with settlement terms to retain immunity from prosecution under the Act.