2015 (5) TMI 1106 - HC - Income Tax

High Court upholds order of Income Tax Settlement Commission, dismissing challenge against application validity. Petitioner's withdrawal choice decisive.

PR. COMMISSIONER OF INCOME TAX (CENTRAL) Versus M/s S.R. FERRO ALLOYS

The High Court upheld the validity of the order passed by the Income Tax Settlement Commission, dismissing the challenge against considering an ... Technically valid application under Section 245C - Settlement Commission - Held that:- When the petitioner was permitted to withdraw the petition with liberty to prosecute the matter before the settlement commission, we see no reason to interfere into the matter on such consideration. Accordingly, finding no merit, the petition is dismissed. Issues:1. Validity of the order passed by the Income Tax Settlement Commission.2. Consideration of the application filed by Respondent No.1.3. Interference in the matter due to parallel proceedings before the Settlement Commission and the Court.4. Withdrawal of the writ petition and prosecution before the Settlement Commission.Analysis:1. The High Court addressed the issue of the validity of the order passed by the Income Tax Settlement Commission. The petition challenged the Commission's decision to consider an application as technically valid under Section 245C. The petitioner argued that the action was unsustainable due to parallel proceedings before the Settlement Commission and the Court. The Court noted that an order was passed in a related writ petition before the Court on 13.4.2015, after the Commission's decision. However, the Court found that the petitioner had already filed an interlocutory application before the writ petition was disposed of, seeking withdrawal of the petition to proceed before the Settlement Commission. The Court concluded that there was no reason to interfere with the Commission's decision based on the timeline of events.2. Regarding the consideration of the application filed by Respondent No.1, the Court examined the submission made by the petitioner's counsel. It was argued that the valuer's report was found to be unproved and should not be considered by the Income Tax Assessing Officer. Despite this, the Settlement Commission deemed the application valid and directed its continuation. The Court reviewed the contentions of both parties and determined that the petitioner had already sought withdrawal of the writ petition to pursue the matter before the Settlement Commission. The Court found no grounds to interfere with the Commission's decision to proceed with the application.3. The issue of interference in the matter due to parallel proceedings before the Settlement Commission and the Court was also deliberated upon by the High Court. The Court noted that the petitioner had filed an application for withdrawal of the writ petition before the Commission's order was passed. The Court highlighted that the petitioner was granted permission to withdraw the petition and proceed before the Commission. Considering the timeline of events and actions taken by the petitioner, the Court concluded that there was no merit in interfering with the Commission's decision.4. Lastly, the Court examined the withdrawal of the writ petition and the subsequent prosecution before the Settlement Commission. It was observed that the petitioner had filed an application for withdrawal with the intention to prosecute the matter before the Commission. The Court emphasized that the petitioner was granted permission to withdraw the petition and pursue the case before the Commission. Based on these circumstances, the Court dismissed the petition, finding no valid reasons to interfere with the proceedings.