Petitioner Wins: Court Orders Reassessment of Tax Application by 31.12.2023, Overturns Interim Board's Decision

The HC ruled in favor of the petitioner, finding that they had fulfilled their tax liability and interest obligations. The court determined that the Interim Board's rejection of the application was unjustified and directed the Board to reassess the petitioner's application on its merits by 31.12.2023. The Writ Petition was disposed of without costs, and related miscellaneous petitions were closed.

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Issues:
The judgment involves the rejection of the petitioner's application by the Interim Board for Settlement-II despite the petitioner paying the entire tax due and interest as required under the Income Tax Act, 1961.

Details of the Judgment:

Issue 1: Rejection of Application by Interim Board

The petitioner approached the Income Tax Settlement Commission twice, but the applications were rejected for non-payment of tax on additional income and interest. Following the amendment of the Act and the establishment of the Interim Board for Settlement II, the petitioner submitted a third application on 10.03.2021, paying the entire tax due amounting to Rs.8,84,47,668. Despite this, the application was rejected by the Interim Board on 15.09.2023, citing non-payment of tax and interest as required by section 245 C (1) of the Income Tax Act, 1961.

Issue 2: Petitioner's Contentions

The petitioner contended that they had indeed paid the entire tax liability and interest, and their application was wrongfully rejected without considering the payments made. The petitioner submitted a rectification application detailing the payment dates and modes, but this was also disregarded by the Interim Board. The petitioner then filed a Writ Petition seeking redressal.

Issue 3: Respondent's Argument

The Senior Standing Counsel for the respondents argued that the petitioner had only made a partial payment of the tax liability and further payments were required, leading to the rejection of the application.

Issue 4: Court's Decision

After hearing both parties, the Court observed that the petitioner had indeed discharged the entire tax liability along with interest. The Court noted that the rejection of the application lacked justification and directed the Interim Board to consider the petitioner's application on its merits and in accordance with the law within a specified time frame.

Conclusion

The Writ Petition was disposed of with the direction for the Interim Board to process the petitioner's application by 31.12.2023. No costs were awarded, and the connected miscellaneous petitions were closed as a result of the judgment.

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