2021 (4) TMI 962 - HC - Income Tax

Settlement Commission order 245D - HELD THAT - As the facts stated by the petitioners can only be verified by the Settlement Commission, it may be left at the discretion of the Settlement Commission to take a decision whether such facts are correct or not and accordingly, the Settlement Commission may proceed with the matter. We have also been taken to the contents of the Finance Bill 2020-21 and the relevant provisions therein but as the said Bill has still not been enacted, the position which stands is to be taken as in the absence of the contents of the said Bill. Considering 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 under Article 226 for mandamus to pass order under section 245D(4) of the Income Tax Act, 1961.

Analysis:
The petitioners sought a writ of mandamus commanding the respondent No.1, the Settlement Commission, to issue an order under section 245D(4) of the Income Tax Act, 1961. The petitioners argued that after filing the settlement application and completion of proceedings and arguments, the Settlement Commission had formally pronounced the case as settled and noted the terms of settlement. However, the formal order under section 245D(4) was still pending as of the date of the petition. The petitioners emphasized that the issuance of the formal order was a procedural requirement, not substantive adjudication, and should not be stalled by subsequent amendments. Therefore, they requested the court to direct the Settlement Commission to issue the formal orders.

On the other hand, the respondent No.2, the Assistant Commissioner of Income Tax, contended that the verification of the facts stated by the petitioners should be left to the discretion of the Settlement Commission. The respondent referred to the Finance Bill 2020-21 and its provisions, highlighting that as the bill had not been enacted yet, the current position should be considered in the absence of its contents.

Upon considering the arguments presented, the court disposed of the petition by directing the Settlement Commission to review the facts as stated 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 had the freedom to proceed in accordance with the law at its discretion. The court permitted direct service of the order.