2020 (3) TMI 551 - HC - Income Tax

Immunity from prosecution u/s 245H (1A) - petitioner had approached the ITSC for settlement of his case - petitioner had requested time to remit the tax and interest as computed by the Settlement Commission in six monthly installments - HELD THAT - In the present case, the facts available on record indicate that the petitioner was going through mental and personal stress and had been engaged in litigation with family members, also contributing to health issues. That apart, the entire amount of tax and interest has been remitted even during the pendency of the writ petition before this Court, which places this petitioner on a better pedestal than the petitioner before the Supreme Court, who remitted the amounts only at the stage when the matter had travelled to, and was pending before the Supreme Court. Thus, in the light of the discussion as aforesaid and taking a cue from the judgment of SANDEEP SINGH VERSUS UNION OF INDIA AND OTHERS 2017 (1) TMI 1147 - SUPREME COURT the impugned order is set aside.

Summary

Issues:
Challenge to order of Income Tax Settlement Commission withdrawing immunity against penalty and prosecution due to default in tax remittance.

Analysis:
1. The petitioner approached the ITSC for settlement, and an order was passed allowing payment in installments. However, the petitioner failed to adhere to the payment schedule due to various difficulties. The Principal Commissioner of Income Tax requested withdrawal of immunity, leading to the impugned order.

2. The ITSC converted the request into a miscellaneous petition, and after hearings, the order withdrawing immunity was passed. The petitioner later remitted the entire tax and interest due, but a claim was raised regarding interest under Section 220(2), which was not pursued by the revenue.

3. The computation of interest was provided, showing payments made for different assessment years. The petitioner remitted the amounts due, and the liability was cleared in full.

4. Referring to a Supreme Court judgment in a similar case, it was noted that the petitioner had complied with the ITSC order within the granted time. The judgment highlighted the provision allowing the Settlement Commissioner to extend the time for payment.

5. The Supreme Court's judgment emphasized that if payments are made within the time granted by the Settlement Commissioner, the immunity from prosecution stands. The court decided that the appellant had made payments within the specified time, allowing the appeal.

6. Considering the petitioner's personal and health issues, along with the timely remittance of taxes and interest during the court proceedings, the High Court set aside the impugned order, following the Supreme Court's guidance.

7. Based on the above discussion and the Supreme Court's judgment, the High Court allowed the writ petition, setting aside the impugned order and closing the connected miscellaneous petition with no costs.