2021 (10) TMI 155 - HC - Income Tax

Validity of Settlement Commission order - in the absence of customer's signature in the delivery challan and in the absence of receipts issued by the second respondent for receipt of old gold from the customers, the authenticity of the claim was neither verifiable nor acceptable - As there is a delay of more than six months in filing the writ petition and further, the writ petition against an order of Settlement Commission is not maintainable - HELD THAT - This Court is of the considered opinion that the delay of about six months in filing a writ petition by the petitioner / Department cannot be considered as enormous, so as to reject the writ petition at the threshold. The ground raised in the writ petition is that based on certain incorrect facts and details, immunity was granted in favour of the second respondent, which caused prejudice to the interest of the Revenue. Thus, the petitioner has chosen to file the present writ petition as such mistakes crept in cannot be rectified by filing a clarification petition. However, this Court cannot adjudicate the disputed facts in the present writ proceedings as the adjudication was made before the Settlement Commission in the presence of the parties. What is transpired and the manner in which the facts recorded and the errors identifiable is the findings, to be considered by the Settlement Commission itself. This Court is of an opinion that the case on hand is a fit case for remand and the grounds raised in the writ petition is to be considered by the Settlement Commission for the purpose of consideration and passing fresh orders.

Summary

Issues: Challenge to Settlement Commission's order based on incorrect facts leading to immunity granted to the assessee. Delay in filing the writ petition. Maintainability of writ petition against Settlement Commission's order.

In this case, the petitioner challenged the order passed by the Settlement Commission, contending that certain incorrect facts led to the grant of immunity to the second respondent. The petitioner argued that the first respondent erred in accepting the second respondent's contention without proper verification, as evidenced by the absence of customer signatures in delivery challans and receipts for old gold. The petitioner claimed that the Settlement Commission's decision was perverse and failed to consider crucial facts, leading to an erroneous grant of immunity to the assessee.

The counsel for the second respondent opposed the petition on grounds of delay in filing, stating that a writ petition against a Settlement Commission's order is not maintainable. They argued that the Income Tax officials' statements were considered appropriately by the Settlement Commission, leading to the grant of immunity. The second respondent contended that the petitioner should have filed a clarification petition under the Income Tax Act instead of a writ petition, and thus, the writ petition should be rejected.

The Court acknowledged the slight delay in filing the writ petition but deemed it not significant enough to dismiss the petition outright. It recognized the petitioner's claim that immunity was wrongly granted due to incorrect facts and details, causing harm to revenue interests. The Court emphasized that disputed facts cannot be adjudicated in a writ proceeding as they were already considered by the Settlement Commission. Therefore, the Court decided that the matter should be remanded back to the Settlement Commission for fresh consideration based on the grounds raised in the writ petition.

Consequently, the Court quashed the impugned order and remitted the matter to the first respondent for reevaluation. Both parties were given the opportunity to submit objections, explanations, and evidence, with the first respondent instructed to adjudicate the issues on merit and in accordance with the law. The Court allowed the writ petition, with no costs imposed, and directed the Settlement Commission to dispose of the matter promptly.