Settlement application maintainability under income-tax rules upheld despite cut-off objection, with merits consideration allowed for eligible assessment years.

A settlement application under the income-tax framework could not be rejected solely because it was filed after 30.09.2021, where the governing directions had already displaced the objection that proceedings had to be pending as on 31.01.2021 and the Supreme Court's Covid-era limitation extension had to be considered. The assessee was therefore entitled to have the settlement application examined on merits for the assessment years covered by the relevant notices and the earlier ruling. That relief applied to assessment years 2015-2016 to 2020-2021, while assessment year 2021-2022 was excluded.

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Issues: (i) Whether the assessee's application for settlement filed on 17.03.2022 could be entertained notwithstanding the objection that no proceedings were pending as on 31.01.2021 and the later filing date of the application. (ii) Whether the assessee was entitled to pursue settlement for the assessment years 2015-2016 to 2020-2021.

Issue (i): Whether the assessee's application for settlement filed on 17.03.2022 could be entertained notwithstanding the objection that no proceedings were pending as on 31.01.2021 and the later filing date of the application.

Analysis: The earlier directions governing settlement applications had already clarified that the insistence on proceedings being pending as on 31.01.2021 could not be sustained. The notices under Section 153A of the Income-tax Act, 1961 had been received within the relevant window, and the filing of the settlement application on 17.03.2022 had to be examined in light of the extension of limitation granted by the Supreme Court during the Covid period. On that basis, the filing could not be rejected merely because it was made after 30.09.2021.

Conclusion: The objection to maintainability of the settlement application was rejected, and the assessee was held entitled to pursue the application.

Issue (ii): Whether the assessee was entitled to pursue settlement for the assessment years 2015-2016 to 2020-2021.

Analysis: The settlement application was directed to be considered on merits for the assessment years covered by the relevant notices and the earlier judgment. The relief was confined to the years for which the preconditions for settlement were satisfied, and the judgment expressly excluded assessment year 2021-2022 from the benefit of the directions.

Conclusion: The assessee was entitled to pursue settlement for assessment years 2015-2016 to 2020-2021, but not for assessment year 2021-2022.

Final Conclusion: The connected appeals were disposed of by applying the earlier settlement ruling, with the assessee obtaining relief to have the settlement application considered for the eligible assessment years and the Revenue's challenge failing to that extent.

Ratio Decidendi: A settlement application cannot be rejected on a rigid cut-off-date objection where the governing directions and the Supreme Court's limitation extension justify its consideration, and the eligible proceedings must be decided on merits for the assessment years for which the statutory preconditions are satisfied.

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