High Court Halts Income Tax Act Section 245HA Abatement

The High Court granted ad-interim relief to petitioners challenging the constitutional validity of Section 245HA of the Income Tax Act, preventing abatement of their settlement applications. Assessing Officers were restrained from acting on pending matters before the Settlement Commission. The Court referred to a related Supreme Court interim order and directed all parties to abide by the Supreme Court's decision on the issue. The High Court disposed of the petitions, instructing authorities not to proceed with matters before the Settlement Commission until the Supreme Court's decision. Petitioners were given liberty to revive petitions if needed, with the order placed in each petition for reference.

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Issues involved: Challenge to the constitutional validity of Section 245HA of the Income Tax Act, 1961 regarding abatement of applications before the Settlement Commission due to failure to pass orders under Section 245D(4) by a specified date.

Summary:

Constitutional Validity Challenge:
A group of writ petitions challenged the constitutional validity of Section 245HA of the Income Tax Act, 1961, which deals with the abatement of applications before the Settlement Commission in case of failure to pass orders under Section 245D(4) by a specified date. The petitioners sought relief against the abatement of their applications due to non-compliance with the said provision.

Interim Relief Granted:
The High Court granted ad-interim relief to the petitioners, preventing the Settlement Commission from treating their settlement applications as abated under Section 245HA. Additionally, Assessing Officers were restrained from taking up matters where the petitioners' applications were pending before the Settlement Commission before the specified date.

Supreme Court Interim Order:
The attention was drawn to an interim order of the Hon'ble Supreme Court in a related case, providing a stay on the abatement of proceedings pending before the second respondent. The petitioners agreed to abide by the outcome of the Supreme Court decision on the same issue, indicating their willingness to intervene in the matter before the Supreme Court.

Disposal of Petitions:
Considering the similarity of the issues with those before the Supreme Court, the High Court disposed of the petitions with a direction for both petitioners and respondents to abide by the outcome of the Supreme Court decision. It was decided that assessing and appellate authorities under the Income Tax Act should not take up matters pending before the Settlement Commission until the Supreme Court resolves the issue.

Revival of Petitions:
The High Court granted liberty to revive the petitions if necessary, upon filing a note before the Registry, and directed the Registry to place a copy of the order in each petition for reference.

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