Settlement eligibility cannot be narrowed by delegated conditions; rejection for lack of pending proceedings was unsustainable.

An administrative condition narrowing statutory settlement eligibility beyond the parent enactment is impermissible. The Bombay High Court treated earlier jurisdictional rulings as controlling and held that the CBDT could not introduce, through delegated power, an additional requirement that the assessee be eligible to file a settlement application on 21 January 2021. On that basis, rejection of the settlement application on the ground that no proceedings were pending as on 31 January 2021 could not be sustained. The settlement order was set aside, and the application was directed to be considered on merits in accordance with law.

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Issues: Whether the Interim Board for Settlement was justified in rejecting the assessee's settlement application for the relevant assessment years on the ground that no proceedings were pending as on 31 January 2021.

Analysis: The dispute turned on the effect of the statutory changes brought in by the Finance Act, 2021 and the CBDT notification framed in that context. The governing question had already been answered by the jurisdictional High Court in earlier decisions, which held that an additional eligibility condition requiring the assessee to be eligible to file a settlement application on 21 January 2021 could not be introduced by the CBDT under its power-making authority. Those decisions were treated as applicable on the same facts. In that light, the rejection of the settlement application on the footing that no pending proceedings existed on the relevant date could not be sustained.

Conclusion: The rejection of the settlement application was unsustainable and the assessee was entitled to have the application considered on merits.

Final Conclusion: The writ petition was allowed and the impugned settlement order was set aside, with directions to proceed in accordance with law.

Ratio Decidendi: An administrative or delegated condition that narrows statutory eligibility for settlement beyond the parent enactment is impermissible, and a settlement application cannot be rejected on such an eligibility requirement when the governing law does not support it.

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