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2024 (3) TMI 1261 - HC - Income TaxValidity of Settlement Commission orders - Pronouncement of decision after completion of hearing by Settlement Commission - Commission pronounced the judgement but the same was not reduced in writing - Petitioners have prayed to direct the respondent No. 1-Interim Board of Settlement to pass an order u/s 245D (4) of the Income Tax Act in case of the petitioners in the same terms of settlement as pronounced by the Settlement Commission on conclusion of the hearing on 27/28.01.2021. HELD THAT - Respondent No. 2 is not ready and willing to confirm the fact of conclusion of the settlement relying upon the official case Diary Notings. However, it is apparent from the record of the affidavit filed by the Vice President and Member of the Settlement Commission in compliance of the order dated 25.03.2021 passed by this Court in 2021 (3) TMI 1450 - GUJARAT HIGH COURT to the effect that the case was heard on 28.01.2021 and the terms of the settlement were accepted by the Settlement Commission, immunity was granted with regard to interest and penalty and the case was pronounced as settled . Therefore, the affidavit filed by respondent No. 2 relying upon the Case Diary Noting is contrary to what is stated on oath by the Vice President and the then Member of the Settlement Commission. In view of the above this Court shall give credence to the affidavit dated 28.03.2021 filed by the Vice President and Member of the Settlement Commission wherein, in no uncertain terms in para Nos. 2 and 6, the Vice President and the then Member of the Settlement Commission has confirmed that hearing was concluded and the terms of the settlement were pronounced by the Settlement Commission. Therefore, relying upon the decision of Vinod Kumar Singh ( 1987 (11) TMI 385 - SUPREME COURT we direct respondent No. 1-Interim Board to pass an order under section 245D (4) of the Act accepting the application as settled in terms of the settlement as pronounced by the Vice President and Member of the Settlement Commission on 28.01.2021 as per affidavit dated 28.03.2021 by granting immunity from penalties and prosecutions under Income Tax Act, 1961 to the petitioners. Petition allowed.
Issues Involved:
1. Direction to pass an order u/s 245D(4) of the Income Tax Act, 1961. 2. Validity of the Settlement Commission's pronouncement of settlement. 3. Effect of the Finance Bill 2021 on the pending order. Summary: Issue 1: Direction to pass an order u/s 245D(4) of the Income Tax Act, 1961. The petitioners filed applications for settlement u/s 245C(1) and the Settlement Commission accepted these applications, passing an order u/s 245D(1). Subsequently, the Principal Commissioner of Income Tax issued a letter u/s 245D(2B) calling for information, which was provided. The Settlement Commission passed an order u/s 245D(2C) to proceed with the case. The final hearings took place, and the petitioners claimed the Settlement Commission formally pronounced the case as settled, with only the text of the order u/s 245D(4) pending. However, the Finance Bill 2021 ceased the operation of the Settlement Commission from 01.02.2021, and no order was received by the petitioners until 31.01.2021. The petitioners requested the Settlement Commission to pass an order u/s 245D(4), but no reply was received, prompting them to file a Special Civil Application. Issue 2: Validity of the Settlement Commission's pronouncement of settlement. The Court directed the Settlement Commission to verify the facts and pass an appropriate order. The then Members of the Settlement Commission confirmed that the case was formally pronounced as settled on 27/28.01.2021, but the order could not be passed due to the tenure end of a member and COVID-19 protocols. The Interim Board for Settlement later intended to re-hear the case de novo, which the petitioners opposed, leading to further petitions. Issue 3: Effect of the Finance Bill 2021 on the pending order. The Finance Bill 2021 proposed the cessation of the Settlement Commission, impacting the pending order. The Court considered an affidavit by the Vice President and Member of the Settlement Commission, confirming the case was pronounced as settled. The Court referred to the Apex Court's decision in Vinod Kumar Singh vs. Banras Hindu University, emphasizing that once a judgment is pronounced, it should be acted upon unless exceptional circumstances exist. Judgment: The Court directed the Interim Board to pass an order u/s 245D(4) accepting the application as "settled" in terms of the pronouncement by the Settlement Commission on 28.01.2021, granting immunity from penalties and prosecutions under the Income Tax Act, 1961. The petitions were allowed to this extent with no order as to costs.
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