TaxTMI 
TaxTMI 
2025 (6) TMI 1557
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.... Appeals preferred by the Revenue impugn the common judgment dated 22.08.2024 of a learned Single Judge in the writ petitions. The brief facts: 2. The writ petitions in question were filed by assessees under the Income Tax Act, 1961 [hereinafter referred to as the "I.T. Act"], aggrieved by the order of the Interim Board for Settlement that rejected the applications preferred by them for settlement of their cases in accordance with the provisions of Chapter XIX-A of the I.T. Act. The reason cited by the Interim Board for Settlement for rejecting the applications was that, although the applications for settlement had been filed on or before 30.09.2021, which was the last date for receipt of valid applications for settlement, there was no case pending in relation to the assessee as on 31.01.2021, within the meaning of the provisions of Section 245C(1), Section 245A of the I.T. Act read with the Central Board of Direct Taxes [CBDT] Instructions F.No.299/22/2021-Dir (Inv-III)/174 dated 28.09.2021, and hence the applications in question were not maintainable before the Board. It is the legality of the said stand taken by the Interim Board that was called in question in the writ pet....
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....l amount of income-tax payable on such income and such other particulars as may be prescribed, to the Settlement Commission to have the case settled and any such application shall be disposed of in the manner hereinafter provided. Section 245C(5): (5) No application shall be made under this section on or after the 1st day of February, 2021. CBDT order dated 28.09.2021 F.No.299/22/2021-Dir (Inv.III)/174 Government of India Ministry of Finance Department of Revenue (Central Board of Direct Taxes) * * * * * Civil Centre, New Delhi Dated the 28.09.2021 ORDER Subject: Order under section 119(2)(b) of the Income Tax Act, 1961 for filing applications for settlement before the Interim Board for Settlement - reg. The Finance Act, 2021has amended the provisions of the Act to inter alia provide that the Income-tax Settlement Commission (ITSC) shall cease to operate with effect from 01.02.2021. Further, it has also been provided that no application for settlement can be filed on or after 01.02.2021, which was the date on which the Finance Bill, 2021 was laid before the Lok Sabha. In order to dispose of the pending settlement app....
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....e respondents assessees in these appeals were all subjected to search proceedings under Section 132 of the I.T. Act on various dates prior to 31.01.2021. However, the notices invoking the provisions of Section 153A/Section 153C were served on them only after 31.03.2021. In the light of the statutory provisions noticed above, and the CBDT order issued in terms of Section 119(2)(b) of the I.T. Act, the Interim Board for Settlement found their applications for settlement to be not maintainable because they didn't satisfy the criteria of having a 'pending case' within the meaning of the term under the Statute, on or before 31.01.2021. Proceedings before the Single Judge: 5. The learned Single Judge who considered the writ petitions found that in view of the decision of the Madras High Court in Jain Metal Rolling Mills v. Union of India & Ors. - [MANU/TN/6417/2023], that had since attained finality owing to the dismissal of the SLP, preferred by the Revenue, by the Supreme Court, the cut off date for determining the eligibility to file an application for settlement had to be seen as 31.03.2021 as against the statutory prescription of 31.01.2021, since the Finance Act, 2021 came in....
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....before 30-09-2021. Orders issued by the Interim Board for Settlement finding the applications for settlement filed by the petitioners as not maintainable will stand set aside. The applications are restored to the files of the Interim Board for Settlement, to be disposed of keeping in mind the declaration of the law contained in this judgment." The contentions in the appeals: 6. In the appeals before us, the Revenue's contentions, as articulated by Sri. Jose Joseph, the learned Standing Counsel for the Income Tax Department, are three fold viz. ● That the learned Single Judge erred in ignoring the plain words used in the relevant provisions under Chapter XIX-A of the I.T. Act, and reading into the said provisions concepts that were expressly excluded through amendments that had been carried out in the past; ● That when the express provisions of the I.T. Act defined a pending case with reference to the period between the initiation of proceedings and the culmination of those proceedings, and the initiation of proceedings was pegged to the date of issuance of a notice under Sections 153A/153C as the case may be, there was no warrant for holding that....
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....hrough the Finance Act, 2021. Prior to that, the major amendments effected to the provisions of Chapter XIX-A, that governed the eligibility of an assessee to approach the Settlement Commission for a settlement of their cases, and the procedure to be followed for the same, were in 2010, 2014 and 2015 through the respective Finance Acts of those years. Thereafter, the substantive provisions governing eligibility of an assessee to approach the Settlement Commission remained unchanged for over five years when the Finance Act, 2021 was enacted, that provided for the abolition of the Settlement Commission itself, and the settlement of pending cases by an Interim Board for Settlement that was constituted solely for that purpose. 9. On a reading of the statutory provisions as they stood during the relevant time, it is unambiguously clear that in terms of Section 245C, an assessee could, at any stage of a case relating to him, approach the Settlement Commission for a settlement of his case. The eligibility condition for approaching the Settlement Commission was the existence of a case relating to him, at the time of preferring the application for settlement before the Commission. 'Case'....
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....tion that ensued at the instance of assessees, who found that their vested right to opt for settlement under the I.T. Act had been taken away with effect from a date that was anterior to the date of coming into force of the Finance Act, 2021 viz. 01.04.2021. The said issue was resolved through the judgment of the Madras High Court in Jain Metal Rolling Mills (supra) that held that those amendments to the I.T. Act could take effect only from 01.04.2021, and hence the assessees could file applications for settlement upto 31.03.2021. The above declaration of law has since attained finality through the dismissal of further proceedings carried by the Revenue before the Supreme Court. 12. While so, through an order passed under Section 119(2)(b) of the I.T. Act, the CBDT clarified that applications for settlement could be filed upto 30.09.2021. However, the said relaxation was hedged in with a condition that the eligibility requirement of having a 'case' that was 'pending' before an assessing officer, had to be satisfied as on 31.01.2021 (postponed to 31.03.2021 on account of the ruling in Jain Metal Rolling Mills (supra)). In the context of the present litigation, it is the above CBD....
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....tions imposed by the CBDT while extending the last date for filing applications for settlement to 30.09.2021. It is significant, in this context, that a Division Bench of the Bombay High Court in Sar Senapati Santaji Ghorpade Sugar Factory Ltd. v. Asst. Commissioner of Income Tax - [(2024) 161 Taxmann.com 166 (Bombay)] held as follows in a writ petition that was filed challenging the provisions of the said CBDT order, to the extent it laid down an additional condition that the assessee should satisfy the eligibility requirements as on 31.01.2021, as ultra vires its power under Section 119(2)(b) of the I.T. Act; "24. As regards the notification dated 28th September 2021 issued by the CBDT under Section 119(2)(b) of the Act, the date for making application has been extended by the said notification to 30th September 2021, which is clearly within the scope of the powers of the CBDT under Section 119 of the Act. Section 119 of the Act provides that the Board may from time to time, issue such orders, instructions and directions to other Income Tax Authorities as it may be deemed fit for proper administration of this Act. The provisions of the section have been interpreted by th....