2022 (2) TMI 234 - HC - Income Tax

Validity of Settlement Commission order - validity of the application as made by the assessee - appropriate forum for the redressal of Family disputes - HELD THAT - Settlement Commission, in exercise of Section 245D(4) provision, has already passed an order which has been given to its effect vide order dated 14.03.2019 (Annexure R-5/5), even before filing of this petition, yet the same has not been challenged by the Petitioners irrespective of the fact that the order impugned dated 02.02.2018 (Annexure P/1) has been merged therein. Pertinently to be observed here further that the Petitioner Suresh Shadija and Respondents No. 3 4 (Shri Pawan Kumar Shadija and Smt. Sandhya Shadija) belong to the same family and it appears to be of their personal dispute as reflected from the proceedings (Annexure P/24) initiated by the Petitioner on 11.05.2017 before the National Company Law Tribunal under Sections 58 and 59 of the Companies Act, 2013, which is pending under consideration before the Tribunal. It, thus, appears that the petitioners have already approached the appropriate forum for the redressal of their disputes. The petition is accordingly dismissed.

Summary

Issues:
Challenge to order passed by Income Tax Settlement Commission regarding settlement application; Validity of application under Section 245C of the Income Tax Act, 1961; Further order under Section 245D(4) of the Act; Personal dispute among family members; Dismissal of petition.

Analysis:
The petition challenged an order dated 02.02.2018 by the Income Tax Settlement Commission regarding the settlement application of certain respondents. The petitioners contended that the respondents, who are directors of a company, did not disclose crucial information before the Settlement Commission. They raised concerns about shares being sold to other companies and a personal dispute within the family. The Settlement Commission had allowed the application under Section 245D(1) of the Income Tax Act, 1961 and subsequently called for a report from the Principal Commissioner of Income Tax. The order passed by the Settlement Commission was preliminary in nature under Section 245D(2C) of the Act, which deemed the application valid after due consideration. The Settlement Commission was required to pass a further order under Section 245D(4) after examining records and reports. Despite a subsequent order being passed by the Settlement Commission, the petitioners did not challenge it. The court noted the personal dispute among family members and observed that the appropriate forum had been approached for redressal. Consequently, the court dismissed the petition, declining to entertain it.

This detailed analysis covers the various issues involved in the legal judgment, providing a comprehensive understanding of the proceedings and the court's decision.