Case Note & Summary
The petitioner, a company engaged in sugar and ethanol business, was subjected to a search under Section 132 of the Income Tax Act, 1961 on 25.07.2019. Subsequently, a notice under Section 153A was issued. The petitioner sought to file a settlement application before the Settlement Commission. However, a Press Release dated 07.09.2021 and a Notification dated 28.09.2021 restricted eligibility to file such applications to those assessees who were eligible as on 31.01.2021. The petitioner challenged these conditions as ultra vires the Act. The court analyzed the provisions of Section 245C and found that the Act did not impose any such cut-off date for eligibility. The court held that the conditions imposed by the press release and notification were beyond the scope of the Act and could not be sustained. The petition was allowed, and the impugned conditions were quashed.
Headnote
A) Income Tax - Settlement Commission - Eligibility - Section 245C of Income Tax Act, 1961 - The court considered whether a press release and notification could impose an additional eligibility condition for filing settlement applications, restricting it to those eligible as on 31.01.2021, when the Act itself did not contain such a restriction. Held that the condition was ultra vires the Act and could not be sustained. (Paras 1-35) B) Income Tax - Interim Board for Settlement - Powers - Section 245B of Income Tax Act, 1961 - The court examined the scope of the Interim Board's powers and held that it could not impose conditions beyond those specified in the Act. (Paras 20-30)
Issue of Consideration
Whether the condition imposed by Press Release dated 07.09.2021 and Notification dated 28.09.2021, restricting eligibility to file application before the Settlement Commission/Interim Board to those assessees who were eligible as on 31.01.2021, is ultra vires the provisions of the Income Tax Act, 1961.
Final Decision
The court allowed the writ petition, quashing the impugned condition in the Press Release dated 07.09.2021 and Notification dated 28.09.2021 to the extent they restricted eligibility to file settlement applications to those assessees eligible as on 31.01.2021.
Law Points
- Interpretation of Section 245C of Income Tax Act
- 1961
- Eligibility for filing settlement application
- Validity of press release and notification imposing additional condition
- Retrospective effect of procedural amendments
