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TMI Blog2022 (7) TMI 438X X X X Extracts X X X X X X X X Extracts X X X X ..... ion work in their proposed twin town IT park at Ambattur. The contract was so structured that there was an excess in the value of the contract, which was to be brought back as investment in the two companies of RR group namely RR Industries Limited and Hanudev Investments Private Limited. In the structured deal between the appellant and RRIPL, the excess contractual amount payable to the appellant was treated as investment in the preferential share capital of the two group companies. In view of the long business relationship, the appellant had with the aforesaid companies, he agreed for the structured transaction during the financial years 2006-2007 and 2007-2008 and accordingly, he invested the excess contract value of the amount in the two companies. 3. The appellant further averred that for the Assessment years 2008- 2009 and 2009-2010, he filed returns of income, which were scrutinised and assessment orders were passed on 28.12.2010 and 29.12.2011 respectively under Section 143 (3) of the Act. In fact, for the assessment year 2008-2009, the Assessing Officer added Rs.3,42,00,000/- towards disallowance under Section 43B of the Act apart from other disallowances totalling Rs.49, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rein (ii) to grant immunity from penalty and prosecution, if any, under the provisions of the Act (iii)waive in full or in part, the interest under Section 234 A, B and C of the Act (iv)upon settlement of the issues, permit the assessee to make necessary entries in his books of accounts to bring into the actual transactions relating to the contract with RRIPL (v) to direct the Income Tax Authorities to give effect to the final settlement ordered by the Settlement Commission and accordingly close all further proceedings under the Act, which are pending in respect of the assessment years in question. 6. The application filed by the son of the assessee, under Section 245(D) of the Act, was taken up for hearing by the second respondent. After hearing the representative of the parties, the second respondent passed an order dated 07.04.2015, allowing the application for settlement of the tax dispute. In Para Nos.11 and 12 of the order dated 07.04.2015, it was observed as follows: "11. We have carefully considered the submissions of the learned A.R. And the facts available on record. The applicant's submission with regard to pendency of assessment for the A.Ys 2007-08 to 2012-13 u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the reply dated 23.06.2016 of the son of the appellant was taken on record by the second respondent. Upon scrutiny of the records, the second respondent, by the order dated 24.06.2016 concluded that enquiry/investigation is necessary to be conducted with respect to the source of money derived by the appellant, quantum of investments made etc. Accordingly, the second respondent directed the third respondent to cause further enquiries/investigation under Section 245D (3) of the Act and to submit a report within thirty days and directed to post the case for further hearing after receipt of a report from the third respondent within the time stipulated. 10. In compliance with the order dated 24.06.2016 of the second respondent, a notice dated 11.07.2016 was issued to the appellant, represented by his son T. Gokulakrishna, calling upon to furnish certain details. In response, a detailed reply dated 14.09.2016 was submitted by the appellant's son to the third respondent along with enclosures. Based on the reply submitted by the appellant's son and upon collecting various other details relating to the transactions the appellant had with two companies viz., M/s. RR Industries ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the Department. The very settlement is a consensus to arrive a settlement and the parties are expected to be fair and honest. With this idea, the concept of true and full disclosure is contemplated in the provision. 13. As far as the writ proceedings are concerned, such disputed facts and circumstances with reference to the documents and evidence cannot be adjudicated under Article 226 of the Constitution of India. Such an adjudication must be done by the Competent Authority by conducting a full-fledged enquiry/trial. In the event of rejection of an application filed under Section 245C, the matter shall go before the Assessing Officer before whom the assessee would get an opportunity to submit his explanation or documents or otherwise. Thus, the High Court under Article 226 cannot adjudicate or made any finding with reference to the disputed facts. Thus, the contention raised by the writ petitioner in this regard need not be considered." 12.1. Assailing the order dated 17.04.2021, the learned senior counsel for the appellant would contend that the learned Judge failed to appreciate the admitted facts and documents produced on behalf of the appellant to show that the second re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d also recorded in earlier proceedings, but in an arbitrary, biased and prejudicial manner, recording perverse findings by considering irrelevant materials ignoring relevant materials, the application has been rejected as not maintainable. The Learned senior counsel also pointed out that the senior member of the commission was also earlier supervising the investigation and hence the decision is biased. The Learned senior counsel further submitted that once the Settlement Commission after having found that all the particulars have been disclosed and that the application was valid, it cannot review the order more particularly when no additional materials were produced. The Learned senior counsel further contended that there is no nexus between the findings regarding non-disclosure and the conclusions and that the report of the principal commissioner has been arbitrarily rejected and findings contrary to the documents have been recorded. The Learned senior counsel further relied upon the Judgments in S.P Jain's case and Calcutta Discount Company Case in support of his contention. That apart, the Learned senior counsel contended that since proper opportunity was not given before errone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he final adjudication under Section 245D (4) of the Act after the Tribunal decides the appeal. Further, the assessment order has not been set aside or decision of the Tribunal has not been given, the issue relating to bogus sales/deductions made under Section 43B of the Act cannot be decided by the second respondent. Accordingly, the second respondent held that the application for settlement is not maintainable. Above all, a specific finding has been given that the appellant has not disclosed full and true income in the application and therefore, the Department was directed to take further course of action in accordance with law. Taking note of the above, the learned Judge rightly concluded that when there are disputed question of facts involved, discretionary jurisdiction conferred under Article 226 of The Constitution of India cannot be exercised. The learned Senior Standing Counsel for the respondents, therefore, prayed for dismissal of the writ appeal. 14. By way of reply, the learned senior counsel for the appellant submitted that the conclusion reached by the second respondent that the Tribunal is ceased of the matter and therefore the Commission could take up the final adju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 53B in case of a person referred to in section 153A or section 153C have been initiated, the additional amount of income-tax payable on the income disclosed in the application exceeds fifty lakh rupees, (ia) in a case where- (A) the applicant is related to the person referred to in clause (i) who has filed an application (hereafter in this sub-section referred to as -specified person?); and (B) the proceedings for assessment or re-assessment for any of the assessment years referred to in clause (b) of sub-section (1) of section 153Aor clause (b) of sub-section (1) of section 153B in case of the applicant, being a person referred to in section 153A or section 153C, have been initiated,the additional amount of income-tax payable on the income disclosed in the application exceeds ten lakh rupees, (ii) in any other case, the additional amount of income-tax payable on the income disclosed in the application exceeds ten lakh rupees, and such tax and the interest thereon, which would have been paid under the provisions of this Act had the income disclosed in the application been declared in the return of income before the Assessing Officer on the date of application, has been pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvalid unless an opportunity has been given to the applicant of being heard: Provided further that where the Principal Commissioner or Commissioner] has not furnished the report within the aforesaid period, the Settlement Commission shall proceed further in the matter without the report of the Principal Commissioner or Commissioner (2D) Where an application was made under sub-section (1) of section 245C before the 1st day of June, 2007 and an order under the provisions of sub-section (1) of this section, as they stood immediately before their amendment by the Finance Act, 2007, allowing the application to have been proceeded with, has been passed before the 1st day of June, 2007, but an order under the provisions of sub-section (4), as they stood immediately before their amendment by the Finance Act, 2007, was not passed before the 1st day of June, 2007, such application shall not be allowed to be further proceeded with unless the additional tax on the income disclosed in such application and the interest thereon, is, notwithstanding any extension of time already granted by the Settlement Commission, paid on or before the 31st day of July, 2007. 3. The Settlement Commission i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or after the 1st day of June, 2010, within eighteen months from the end of the month in which the application was made. (5) Subject to the provisions of section 245BA, the materials brought on record before the Settlement Commission shall be considered by the Members of the concerned Bench before passing any order under subsection (4) and, in relation to the passing of such order, the provisions of section 245BD shall apply. (6) Every order passed under sub-section (4) shall provide for the terms of settlement including any demand by way of tax, penalty or interest, the manner in which any sum due under the settlement shall be paid and all other matters to make the settlement effective and shall also provide that the settlement shall be void if it is subsequently found by the Settlement Commission that it has been obtained by fraud or misrepresentation of facts. (6A) Where any tax payable in pursuance of an order under sub-section (4) is not paid by the assessee within thirty-five days of the receipt of a copy of the order by him, then, whether or not the Settlement Commission has extended the time for payment of such tax or has allowed payment thereof by instalments, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of any such directions as aforesaid. Power of Settlement Commission to reopen completed proceedings. 245E. If the Settlement Commission is of the opinion (the reasons for such opinion to be recorded by it in writing) that, for the proper disposal of the case pending before it, it is necessary or expedient to reopen any proceeding connected with the case but which has been completed under this Act by any income-tax authority before the application under section 245C was made, it may, with the concurrence of the applicant, reopen such proceeding and pass such order thereon as it thinks fit, as if the case in relation to which the application for settlement had been made by the applicant under that section covered such proceeding also : Provided that no proceeding shall be reopened by the Settlement Commission under this section if the period between the end of the assessment year to which such a proceeding relates and the date of application for settlement under section 245C exceeds nine years : Provided further that no proceeding shall be reopened by the Settlement Commission under this section in a case where an application under section 245C is made on or after the 1st d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Chapter, have power to regulate its own procedure and the procedure of Benches thereof in all matters arising out of the exercise of its powers or of the discharge of its functions, including the places at which the Benches shall hold their sittings. Inspection, etc., of reports. 245G. No person shall be entitled to inspect, or obtain copies of, any reports made by any income-tax authority to the Settlement Commission; but the Settlement Commission may, in its discretion, furnish copies thereof to any such person on an application made to it in this behalf and on payment of the prescribed fee : Provided that, for the purpose of enabling any person whose case is under consideration to rebut any evidence brought on record against him in any such report, the Settlement Commission shall, on an application made in this behalf, and on payment of the prescribed fee by such person, furnish him with a certified copy of any such report or part thereof relevant for the purpose. Power of Settlement Commission to grant immunity from prosecution and penalty. 245H. (1) The Settlement Commission may, if it is satisfied that any person who made the application for settlement under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere- (i) an application made under section 245C on or after the 1st day of June, 2007 has been rejected under sub-section (1) of section 245D; or (ii) an application made under section 245C has not been allowed to be proceeded with under sub-section (2A) or further proceeded with under sub-section (2D) of section 245D; or (iii) an application made under section 245C has been declared as invalid under sub-section (2C) of section 245D; or (iiia) in respect of any application made under section 245C, an order under sub-section (4) of section 245D has been passed not providing for the terms of settlement; or (iv) in respect of any other application made under section 245C, an order under sub-section (4) of section 245D has not been passed within the time or period specified under sub-section (4A) of section 245D, the proceedings before the Settlement Commission shall abate on the specified date. Explanation.-For the purposes of this sub-section, "specified date" means - (a) in respect of an application referred to in clause (i), the day on which the application was rejected; (b) in respect of an application referred to in clause (ii), the 31st day of July, 2007; (c) i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invalid under sub-section (2C) of section 245D or has not been allowed to be further proceeded with under sub-section (2D) of section 245D or an order under sub-section (4) of section 245D has not been passed within the time or period specified under sub-section (4A) of section 245D, the Assessing Officer shall allow the credit for the tax and interest paid on or before the date of making the application or during the pendency of the case before the Settlement Commission. Order of settlement to be conclusive. 245-I. Every order of settlement passed under sub-section (4) of section 245D shall be conclusive as to the matters stated therein and no matter covered by such order shall, save as otherwise provided in this Chapter, be reopened in any proceeding under this Act or under any other law for the time being in force. Proceedings before Settlement Commission to be judicial proceedings. 245L. Any proceeding under this Chapter before the Settlement Commission shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228, and for the purposes of section 196, of the Indian Penal Code (45 of 1860). Disclosure of information in the application for settl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seven copies within forty-five days of the receipt of said annexure or within such extended period as may be allowed by the Commission on a request made by the Commissioner. (2) If the Commissioner fails to furnish his report on or before the expiry of the specified period of forty-five days or within further extended period as the Commission may allow, as the case may be, the Commission may proceed to hear the case without such report. (3) A copy of the report of the Commissioner under sub-rule (1) of rule 9 shall be sent to the applicant by the Commission. Applicant's Comments on Commissioner's report under rule 9. 9A.(1) The applicant may furnish comments on the Commissioner's report received under rule 9 within fifteen days of the receipt of the copy of the said report by him or within such extended period as may be allowed by the Commission on a written request made by the applicant. (2) The comments of the applicant shall be accompanied by a paper book in support thereof, having the specifications referred to in rule 7. (3) If the applicant fails to furnish comments on or before the expiry of the specified period of fifteen days or within further exten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is later found that it has been obtained by fraud or misrepresentation of facts. A conjoint reading of sub-sections 3, 4A, 6, 6B are all concerned with the final order to be passed or passed by the Commission under Section 4 and not with the orders passed under Section 245D (1) or (2C) of the Act. There is no provision under the Act to review or recall the order under sub-sections (1), (2C) and (4) and the power to rectify any mistake apparent from the record or amend any order passed by it referred in sub-section 6B is also confined only to an order under sub-section 4. The word "apparent" makes it clear that the mistake must be visible from the face of the record and is not be discerned by a fishing and roving enquiry. As per section 245F, once an application is filed and until rejected, it is only the commission which has powers as that of an Income Tax Authority to deal with matters or issues before it within the scheme of settlement of cases and the Assessing Officer ceases to have any powers. The powers therein are not akin to the powers of an assessing authority making regular assessment or revision of assessment to accept or deny the explanation offered by the assessee, bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T. Commissioner v. B.N. Bhattacharjee [(1980) 3 SCC 54 : AIR 1979 SC 1724.] on a preliminary objection. The Supreme Court held thus: "47. The preliminary objection raised by Shri A.K. Sen need not detain us because we are satisfied that the amplitude of Article 136 is wide enough to bring within its jurisdiction orders passed by the Settlement Commission. Any Judgment, decree, determination, sentence or order in any case or matter passed or made by any Court or Tribunal, comes within the correctional cognisance and review power of Article 136. The short question, then, is whether the Settlement Commission cannot come within the category of "Tribunals". To clinch the issue, Section 245L declares all proceedings before the Settlement Commission to be judicial proceedings. We have hardly any doubt that it is a Tribunal. Its powers are considerable; its determination affects the rights of parties; its obligations are quasi-judicial; the orders it makes at every stage have tremendous impact on the rights and liabilities of parties. xxxxxxxxx In short, Settlement Commissions are Tribunals. The preliminary point fails." Thus the Settlement Commission is held to be a Tribunal. That ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State of Orissa v. Dr. Binapani Dei [AIR 1967 SC 1269 : (1967) 2 SCR 625 : (1967) 2 LLJ 266] as also the observations in Administrative Law by H.W.R. Wade, 5th Edn., pp. 310-311 that the act in violation of the principles of natural justice or a quasi-judicial act in violation of the principles of natural justice is void or of no value. In Ridge v. Baldwin [1964 AC 40 : (1963) 2 WLR 935 : (1963) 2 All ER 66] and Anisminic Ltd. v. Foreign Compensation Commission [(1969) 2 AC 147 : (1969) 2 WLR 163 : (1969) 1 All ER 208] the House of Lords in England has made it clear that breach of natural justice nullifies the order made in breach. If that is so then the order made in violation of the principles of natural justice was of no value. If that is so then the application made for the settlement under Section 245-C was still pending before the Commission when the amendment made by Finance Act of 1979 came into effect and the said amendment being procedural, it would govern the pending proceedings and the Commission would have the power to overrule the objections of the Commissioner. Dr. V. Gauri Shankar, appearing for the revenue, did not seriously contest that position. He accepted the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should have opportunity to make. In exercise of our power of judicial review of the decision of the Settlement Commission we are concerned with the legality of procedure followed and not with validity of the order. See the observations of Lord Hailsham in Chief Constable of the North Wales Police v. Evans [(1982) 1 WLR 1155] . Judicial review is concerned not with the decision but with the decision making process." (d) Ajmera Housing Corpn. v. CIT [(2010) 8 SCC 739 : 2010 SCC OnLine SC 918], wherein, it was held by the Hon'ble Supreme Court as follows: "45. Ultimately the High Court observed that: (i) since the Settlement Commission had not supplied the annexure filed on 19-9-1994, declaring additional income of Rs. 11.41 crores, due opportunity had not been given to the Revenue to place its stand properly; (ii) huge amount of unexplained expenses, unexplained loans and unexplained surplus, total of which was more than Rs. 14 crores, was not taken into consideration while passing the final order; and (iii) the Settlement Commission had imposed token penalty of Rs. 50 lakhs while on its own assessment leviable penalty would have been Rs. 562.87 lakhs. Further, if the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12 queries was issued on 08/09/2016, a detailed reply to the letter was given on 14/09/2016, the Assistant Commissioner of Income Tax, the AO had filed an additional report dated 19.09.2016 to the Joint Commissioner of Income Tax, the Joint Commissioner of Income Tax filed his further report on 19/09/2016 along with the report of the AO to the Principal Commissioner and the Principal Commissioner filed his report under 245D(3) with the reports of the AO and JCIT on 20/09/2016 on the last date of hearing and the final orders rejecting the application as not maintainable was passed on 26/09/2016. From the order dated 26/09/2016, it is evident that the hearings took place on 24/06/2016, 08/09/2016 and 20/09/2016. Even though the further report under 245D(3) was filed on 20/09/2016 along with the report of the JCIT and the AO at the time of hearing, it is evident that no further opportunity has been afforded by the Commission contrary to the Section 245D (4), despite the fact that the report of the AO has been referred and relied upon in the order by the 2nd respondent commission and despite an opportunity was sought by the appellant and the Commissioner. The request for further opport ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... creditors. To the 12 queries raised on 08/09/2016, a detailed reply dated 14/09/2016 has been furnished. In the said reply at para 4, the appellant has reiterated that the basis of disclosure of additional income is as shown in the SA (Settlement Application). In para 7, it is mentioned that the details of the contract receipts and the inflated amount are already given in the SA and also in the replies. The appellant also in para 8 dealt with the sundry creditors and in para 9, the impact of the floods in 2015 was mentioned also specifically claiming that in the spirit of settlement, Rs.1.61 crores was offered. The source for payment of the settlement amount is also furnished in the said reply. However, the Commission has without looking at the contentions in the application, the annexures therewith and misdirecting the explanations on queries as amounting to non-disclosure at the time of filing the application, rejected the application as not maintainable. 22. The appellant also in the form of additional typed set furnished before this court, the particulars furnished to the commission and during the investigation under Section 245D(3) to the AO along with their reply dated 14.09 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a quasi-judicial authority in deciding a matter in the nature of arbitration. The fact that the senior member of the Commission was earlier supervising the investigation conducted against the appellant and that of RR group, is not disputed. The composition of the commission with such a member, in the view of this court would lead to institutional bias and at times even personal bias. The bias in the minds of the adjudicating authority, may not be evident openly, but would reflect in the manner in which proceedings are conducted and concluded. The settled law propounded on the legal maxim nemo judex in sua causa debet esse, comes into operation. 23. At this juncture, it will be useful to refer to the judgment of the Apex Court in A.K. Kraipak v. Union of India, (1969) 2 SCC 262, wherein, while dealing with a situation where a candidate himself was part of the selection board, the Apex Court setting aside the entire selection, held as follows: "15. It is unfortunate that Naqishbund was appointed as one of the members of the selection board. It is true that ordinarily the Chief Conservator of Forests in a State should be considered as the most appropriate person to be in the select ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o which his opinion influenced their conclusions. We are unable to accept the contention that in adjudging the suitability of the candidates the members of the board did not have any mutual discussion. It is not as if the records spoke of themselves. We are unable to believe that the members of selection board functioned like computers. At this stage it may also be noted that at the time the selections were made, the members of the selection board other than Naqishbund were not likely to have known that Basu had appealed against his supersession and that his appeal was pending before the State Government. Therefore there was no occasion for them to distrust the opinion expressed by Naqishbund. Hence the board in making the selections must necessarily have given weight to the opinion expressed by Naqishbund. 23. One more argument of the learned Attorney General remains to be considered. He urged that even if we are to hold that Naqishbund should not have participated in the deliberations of the selection board while it considered the suitability of Basu, Baig and Kaul, there is no ground to set aside the selection of other officers. According to him it will be sufficient in the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. In para 20 the following has been held: (SCC p. 272) "20. The aim of the rules of natural justice is to secure justice or to put it negatively to prevent miscarriage of justice. These rules can operate only in areas not covered by any law validly made. In other words they do not supplant the law of the land but supplement it. The concept of natural justice has undergone a great deal of change in recent years. In the past it was thought that it included just two rules, namely, (1) no one shall be a judge in his own case (nemo debet esse judex propria causa), and (2) no decision shall be given against a party without affording him a reasonable hearing (audi alteram partem). Very soon thereafter a third rule was envisaged and, that is, that quasi-judicial enquiries must be held in good faith, without bias and not arbitrarily or unreasonably. ..." 27. In State of U.P. v. Saroj Kumar Sinha [State of U.P. v. Saroj Kumar Sinha, (2010) 2 SCC 772 : (2010) 1 SCC (L&S) 675] , this Court had laid down that Enquiry Officer is a quasi-judicial authority, he has to act as an independent adjudicator and he is not a representative of the department/disciplinary authority/Government. In paras ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the case while inquiring into charges, (vi) The adjudicator shall not decide on the dictates of his superiors or others, (vii) The adjudicator shall decide the issue with reference to material on record and not reference to extraneous material or on extraneous considerations. If any one of these fundamental rules is breached, the inquiry will be vitiated." 37. The High Court having come to the conclusion that the Enquiry Officer has acted as prosecutor also, the capacity of independent adjudicator was lost while adversely affecting his independent role of adjudicator. In the circumstances, the principle of bias shall come into play and the High Court was right in setting aside the dismissal orders by giving liberty to the appellants to proceed with inquiry afresh. We make it clear that our observations as made above are in the facts of the present cases." The underlying ratio in the above case is that no man can be a prosecutor and also an adjudicator. In the case before us, the senior member had personal knowledge about the transaction which the assessee termed it as financial accommodation and the department termed it as " undisclosed income". When the principal com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cular inference and communicated it to the assessing authority. How could an assessee be charged with failure to communicate an inference, which he might or might not have drawn? 13. We have therefore come to the conclusion that while the duty of the assessee is to disclose fully and truly all primary relevant facts, it does not extend beyond this." 26. Obviously, one can approach the settlement Commission only when there is an undisclosed income that escaped assessment. Therefore, it is completely unnecessary and beyond the scope of the commission to find fault or with the modus operandi of the assessee in arranging his tax liability, while deciding an application under Section 245D. In the present case, we are satisfied that the assessee has fully disclosed all the primary facts and produced the documents in support of the same. At the cost of repetition, all materials placed before the Commission are to be considered as per Section 245D (5). Therefore, we do not agree with the casual finding of the Learned Judge that the disclosure must be acceptable disclosure. It is relevant to point out that no new materials were produced by the department to enable the settlement commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the word "Pending applications" as follows: "Pending application" means an application which was filed under section 245C and which fulfils the following conditions, namely: - (i)it was not declared invalid under sub-section (2C) of section 245D; and (ii)no order under sub-section (4) of section 245D was issued on or before the 31st day of January 2021 with respect to such application" 29. By the amendment, it was made clear that no application will be entertained after 01.02.2021. Thereafter, the Central Government has constituted Interim Board for Settlement vide Notification no. 91 of 2021 dated 10.08.2021. Subsequently, the following press release dated 07.09.2021 was issued by the Central Board of Direct Taxes. Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes New Delhi, 7th September, 2021 PRESS RELEASE CBDT allows taxpayers an opportunity to file application for settlement The Finance Act, 2021 has amended the provisions of the Income-tax Act, 1961 ("the Act") to inter alia provide that the Income-tax Settlement Commission ("ITSC") shall cease to operate with effect from 01.02.2021. Further, it has also been provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... file such application again. Legislative amendments in this regard shall be proposed in due course. (Surabhi Ahluwalia) Commissioner of Income Tax (Media & Technical Policy) Official Spokesperson, CBDT 30. The said press release was issued after several High Courts issued directions to entertain the applications for settlement. It was further stated that the assessees, who were eligible to file an application as on 31.01.2021 and where assessments are pending, would be eligible to file their application 30th September 2021. It was also made clear that the applications filed by the assessees based on the directions of the High Courts would be entertained. Following the press release, an order under Section 119 (2) (b) of the Act came to be passed, which reads as follows: " ORDER Civic Centre, New Delhi Dated the 28.09.2021 Subject: Order under section 119(2)(b) of the Income Tax Act, 1961 for filing applications for settlement before the Interim Board for Settlement - reg. The Finance Act, 2021 has amended the provisions of the Act to inter alia provide that the Income-tax Settlement Commission (lTSC) shall cease to operate with effect from 01.02.2021. Further, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication has been passed on 26.09.2016, the challenge to the same was accepted by this Court and interim order was granted by this court directing the assessment proceedings to be kept under abeyance. The writ petition was pending when the Settlement Commission was abolished and Interim Board was brought into operation. This court is of the view that the restrictive circumstances under which an Interim Board can entertain an application, is applicable only when an application is filed afresh or pending and not applicable to cases where the High Court in exercise of its powers under Article 226 of the Constitution of India, set asides an earlier order and remands back the matter for fresh consideration. The powers of the High Court which emanate from the Constitution cannot be curtailed by a law made by the legislature, such law being subordinate to the Constitution. It is not out of place to mention here that it is evident from the press release which was followed by the order dated 28.09.2021, various High Courts had earlier issued directions to entertain the applications for settlement and such applications were also entertained. While so, the contention of the counsel for the dep ..... X X X X Extracts X X X X X X X X Extracts X X X X
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