2017 (8) TMI 1136 - HC - Income Tax

Validity of rejection of application for settlement of case - the petitioner has availed the regular remedy by way of an appeal before the learned Commissioner of Income Tax (Appeals) and the said appeals are said to be still pending - Held that - The regular assessment procedure has been undertaken by the Assessing Authorities and against the orders passed by the Assessing Authorities, the petitioner has already availed his appellate remedy in accordance with the provisions of the said Act, the challenge to the order passed by the Settlement Commission, rejecting the Application under Section 245-C of the Act, at the threshold on the ground of it being a non-speaking order has out-lived its importance and the matter cannot be now restored back to the Settlement Commission at this stage to hear the merits of the settlement proposals given in the Application by the petitioner assessee, at that time. Till the said appeals are decided by the CIT(A), it is expected that the Respondent Department will not take precipitation action against the petitioner for recovery of the balance amount of the tax dues from the petitioner as determined under the impugned assessment orders.

Summary

Issues:
Challenge to order of Income Tax Settlement Commission rejecting settlement application under Section 245-C of the Income Tax Act, 1961 on grounds of being a non-speaking order.

Analysis:
The petitioner, an Assessee, challenged the order of the Income Tax Settlement Commission rejecting the settlement application for Assessment Years 2007-08 to 2011-2012. The Settlement Commission held that the Applicant failed to explain the additional income offered for settlement and the manner of earning the same. The petitioner contended that the order was non-speaking and lacked proper consideration of the facts presented in the application.

The Respondent Department highlighted that regular assessment orders had been passed against the petitioner for the mentioned assessment years. The petitioner had appealed these orders before the Commissioner of Income Tax (Appeals), and the appeals were pending. The petitioner mentioned that a significant portion of the disputed demand had been paid, considering the amount deposited with the Settlement Commission.

The Court observed that since the petitioner had already availed the appellate remedy against the regular assessment orders, challenging the Settlement Commission's order on procedural grounds had lost significance. The Court declined to send the matter back to the Settlement Commission for further consideration. Instead, it directed the Appellate Authority, the Commissioner of Income Tax (Appeals), to expedite the disposal of the pending appeals within six months.

The Court instructed the Respondent Department not to take aggressive recovery actions against the petitioner until the pending appeals were decided. The writ petitions were disposed of with these directions, and no costs were awarded in the matter.