Court orders reconsideration of Income Tax Act application, emphasizing fair hearing and rejecting laches argument.

The Court set aside the Settlement Commission's order rejecting the petitioner's application under Section 245D(2C) of the Income Tax Act, finding the application valid. The Court emphasized that discussing income taxability at that stage exceeded the provision's scope and accepted the petitioner's explanation for the delay in approaching the Court, rejecting the revenue's argument of laches. The Court directed the Commission to hear the petitioner on merits promptly, emphasizing the importance of a fair hearing.

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Issues:
Challenge to Settlement Commission's order under Section 245D(2C) of the Income Tax Act - Validity of application - Disclosure of income - Laches in approaching the Court.

Analysis:

1. The petitioner challenged an order of the Settlement Commission (SC) dated 15.05.2019 under Section 245D(2C) of the Income Tax Act, where the SC rejected the petitioner's application as invalid. The petitioner, a UK-based consultant engineer, had contracts with Foster Wheeler Energy Limited for various services. Surveys led to re-opening of assessments for certain years, and the petitioner filed a settlement application under Section 245C, which was admitted under Section 245D(1).

2. The Commissioner, in the impugned order, examined the disclosure of income by the petitioner, focusing on the nature of documentation and scope of work. The Court noted that discussing the taxability of income at the stage of 245D(2C) exceeded the provision's scope, citing a previous case where a similar issue was addressed, and the decision was upheld by the Division Bench. The revenue did not contest this position.

3. The revenue argued that the petitioner delayed approaching the Court, filing the writ petition six months after the impugned order and after participating in assessment proceedings. The petitioner attributed the delay to administrative reasons requiring approvals from abroad. The Court accepted this explanation, rejecting the revenue's argument of laches and allowing the writ petition.

4. Consequently, the Court set aside the impugned order, directing the Settlement Commission to hear the petitioner on merits after issuing notice, and to pass a final order expeditiously. The Court closed the connected miscellaneous petitions without costs, emphasizing the importance of allowing the petitioner a fair hearing before the Commission.

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