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2024 (8) TMI 1028 - HC - Income TaxValidity of Impugned Settlement Order passed u/s 245D (4) - Interim Board for Settlement passed the impugned order holding that the Petitioner's Settlement Application was not maintainable, as the Petitioner was ineligible to file the Settlement Applications for the said assessment years as no proceedings were pending as on 31 January, 2021 for the assessment years - HELD THAT - This Court in the case of Sar Senapati Santaji Ghorpade Sugar Factory Ltd. 2024 (4) TMI 204 - BOMBAY HIGH COURT in which the Court considering the provisions of Section 192 as also the other relevant provisions of the Act, has held that the Notification dated 21 September, 2021 issued by the CBDT u/s 119(2)(b), although was issued within the powers as conferred on the CBDT, however, to the extent it laid down additional conditions in paragraph 4 of the said notification to the effect that the assessee should be eligible to file an application for settlement on 21 January, 2021, was held to be beyond the scope of powers of the CBDT under Section 119. The Court accordingly quashed the conditions as incorporated in paragraph 4 of the said notification issued by the CBDT. Thus in the present case, the Interim Board for Settlement thus was not correct in rejecting the Petitioner s Settlement Application for the relevant assessment years, and more so considering the view taken by this Court being the jurisdictional High Court - the decision in Sar Senapati was considered by this Court in a recent decision of this Court in M/s. Vishwakarma Developers 2024 (8) TMI 366 - BOMBAY HIGH COURT in which, in similar circumstances, a writ petition filed by the Petitioner therein, praying for similar reliefs was allowed by quashing and setting aside the orders passed by the Interim Settlement Board. We are of the considered opinion that the Interim Board of Settlement could not have rejected the Petitioner s application, the present proceedings hence are required to be allowed.
Issues:
Challenge to Settlement Order under Section 245D (4) of the Income Tax Act for multiple assessment years. Validity of Settlement Application filed before the Income-tax Settlement Commission. Impact of Finance Act, 2021 on the jurisdiction of the Income-tax Settlement Commission. Eligibility criteria for filing Settlement Application under amended provisions. Interpretation of CBDT notification regarding eligibility conditions for filing Settlement Application. Applicability of previous court judgments on similar issues. Analysis: Issue 1: Challenge to Settlement Order under Section 245D (4) of the Income Tax Act The petitioner filed a Writ Petition under Article 226 challenging the Settlement Order passed under Section 245D (4) for assessment years 2015-16, 2016-17, 2017-18, and 2020-21. The petitioner sought the quashing of the order on grounds of being without jurisdiction, illegal, and arbitrary. Issue 2: Validity of Settlement Application The petitioner filed a Settlement Application before the Income-tax Settlement Commission for the mentioned assessment years to avoid prolonged litigation. The application was contested by the respondents based on the eligibility of the petitioner to file such an application. Issue 3: Impact of Finance Act, 2021 on ITSC jurisdiction The Finance Act, 2021 introduced amendments affecting the operations of the Income-tax Settlement Commission, proposing to abolish it and transfer its jurisdiction. The petitioner's application was filed post these amendments, leading to a dispute regarding the applicability of the new provisions. Issue 4: Eligibility criteria for filing Settlement Application The eligibility criteria for filing a Settlement Application under the amended provisions raised a question concerning the petitioner's eligibility, especially in light of pending assessment proceedings as of a specified date. The Interim Board rejected the application based on this criterion. Issue 5: Interpretation of CBDT notification The petitioner relied on previous court judgments, including one related to the interpretation of a CBDT notification imposing additional conditions for filing Settlement Applications. The court in a similar case had held that such conditions were beyond the CBDT's powers, leading to the quashing of those conditions. Issue 6: Applicability of previous court judgments The court considered previous judgments, such as 'Sar Senapati' and 'Vishwakarma Developers,' which dealt with similar issues of eligibility for filing Settlement Applications. The court found that the principles established in these judgments were applicable in the present case, leading to the allowance of the petitioner's Writ Petition. In conclusion, the High Court allowed the Petition, quashing the Settlement Order and directing the authorities to consider the petitioner's Settlement Application in accordance with law. The court's decision was based on the interpretation of relevant provisions, the impact of legislative amendments, and the applicability of previous court judgments on similar issues.
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