Court extends compliance date and adjourns proceedings on Income Tax Act challenge. Settlement Commission authority and natural justice principles examined.

The Court addressed the challenge to the order under Section 245D(3) of the Income Tax Act for assessment years 2017-18 and 2018-19. It examined the Settlement Commission's authority to pass orders at different stages and allegations of violating natural justice principles. The Court extended the compliance date mentioned in the impugned order until 25th November 2020 and adjourned the case to the third week of November 2020 for further proceedings, considering the complexities and procedural fairness required.

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Issues:
Challenge to impugned order under Section 245D(3) of the Income Tax Act, 1961 for assessment years 2017-18 and 2018-19, violation of principles of natural justice, examination of Settlement Commission's authority to pass orders under different sections, concealment of prior writ petition, and possible impact of prior proceedings on current case.

Analysis:
The petitioners filed a writ petition challenging the order passed by respondent No.1 under Section 245D(3) of the Income Tax Act, 1961, related to assessment years 2017-18 and 2018-19. They sought directions for respondent No.1 to proceed with the hearing under Section 245D(4) after providing them with a reasonable opportunity to be heard. The petitioners argued that the Settlement Commission should have passed the final order under Section 245D(4) after reaching that stage, and it was not appropriate to call for another report without giving them a hearing, alleging a violation of natural justice principles.

The petitioners emphasized that the Settlement Commission can examine the settlement application and pass orders only at three stages: under Sections 245D(1), 245D(2C), and 245D(4). They relied on previous judgments to support their position. On the other hand, the respondents contended that the Settlement Commission can pass an order under Section 245D(3) directing further enquiry/investigation, citing a Bombay High Court judgment. They also raised the issue of the petitioners allegedly concealing a prior writ petition challenging an earlier order of the Settlement Commission.

In response to the respondents' arguments, the petitioners expressed unawareness of the prior writ petition but acknowledged that its outcome could impact the current proceedings. They indicated their intention to file a transfer petition in the Supreme Court to transfer the prior writ petition to the present Court due to the Diwali break. Consequently, the Court adjourned the present writ petition to the third week of November 2020 and extended the compliance date mentioned in the impugned order until 25th November 2020.

In conclusion, the judgment addressed the challenge to the impugned order under Section 245D(3) of the Income Tax Act, the examination of Settlement Commission's authority to pass orders at different stages, allegations of violation of natural justice principles, the issue of concealing a prior writ petition, and the potential impact of prior proceedings on the current case. The Court provided directions for further proceedings, considering the complexities involved and the need for procedural fairness.

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