M/S. PANKAJA KASTURI HERBALS INDIA PVT. LTD., vs. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-1(1),

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WP(C)/17645/2023HC KeralaKLHC01038375202315 June 2023Author: HONOURABLE MR.JUSTICE C.S.DIAS6 pages
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What did the High Court hold?

The High Court directed the 4th respondent (Interim Board for Settlement) to consider and dispose of the petitioner's application in accordance with law and as expeditiously as possible, within a period of one month from the date of receipt of a certified copy of the judgment. The Court explicitly stated that it had not expressed any opinion on the merits of the application. The submission made by the learned Standing Counsel for the respondents, that the fourth respondent would consider the question of maintainability as a preliminary issue and take a decision within four weeks, was recorded and formed the basis for the Court's direction. The ratio is that when a statutory authority indicates a timeline for considering an application, the Court can direct the authority to adhere to it while preserving the authority's right to decide on merits.

What were the facts?

The petitioner, M/s. Pankaja Kasturi Herbals India Pvt. Ltd., is a company engaged in the business of ayurvedic products. Following a search under Section 132 of the Income Tax Act, 1961, the petitioner was advised to approach the Settlement Commission. The petitioner learned of the discontinuation of the Commission and challenged this decision, leading to a High Court order directing the Settlement Commission to accept their application. The petitioner filed an application, but the Bill to discontinue the Commission was enacted. Subsequent orders extended the time limits for filing applications. The petitioner is now facing delays in proceedings under Section 153A and the Settlement Commission observed the petitioner's application as not maintainable. This writ petition seeks a direction to the Settlement Commission to hear and pass orders on the application.

What were the issues?

1. Whether the Settlement Commission's observation that the petitioner's application is not maintainable in law is tenable, and if not, what is the direction to be issued to the Settlement Commission regarding the disposal of the application. Assessee's Contention: The petitioner contends that the Settlement Commission's stand that the application is not maintainable is untenable. The petitioner seeks a direction for the Settlement Commission to hear and pass orders on their application. Revenue's Contention: The revenue, through its Standing Counsel, submitted that the fourth respondent (Interim Board for Settlement) has heard the petitioner and would consider the question of maintainability of the application as a preliminary issue. The fourth respondent would take a decision on the application within four weeks from the date of the hearing.

Which sections of the Income-tax Act were involved?

Section 132,Section 153A

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE C.S.DIAS THURSDAY, THE 15TH DAY OF JUNE 2023 / 25TH JYAISHTA, 1945 WP(C) NO. 17645 OF 2023 PETITIONER: M/S. PANKAJA KASTURI HERBALS INDIA PVT. LTD., KASTURI, POOVACHAL, THIRUVANANTHAPURAM-695575 REPRESENTED BY ITS MANAGING DIRECTOR, DR. J HAREENDRAN NAIR BY ADVS. ANIL D. NAIR TELMA RAJU ANJANA A. AADITYA NAIR RESPONDENTS: 1 DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-1(1), AAYAKAR BHAVAN, 1ST FLOOR, KOWDIAR, THIRUVANATHAPURAM- 695003 2 THE ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE, AAYAKAR BHAVAN, 1 ST FLOOR, KOWDIAR, THIRUVANATHAPURAM- 695003 3 UNION OF INDIA, REPRESENTED BY ITS SECRETARY DEPARTMENT OF REVENUE, MINISTRY OF FINANCE NORTH BLOCK, NEW DELHI-110001 4 INTERIM BOARD FOR SETTLEMENT IBS-2, DELHI.CIVIC CENTRE MINTO ROAD, NEW DELHI-110002 BY ADV SHRI.RAJAGOPALAN.A., CGC SRI. JOSE JOSEPH THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 15.06.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 17645 OF 2023 2 Dated this the 15th day of June, 2023

JUDGMENT The writ petition is filed, inter alia, to direct the 4th respondent to hear and pass orders on an application submitted by the petitioner as acknowledged by Ext.P2. 2. The petitioner is a company doing business in ayurvedic products. A proceeding was initiated by the respondents against the petitioner under Section 132 of the Income Tax Act, 1961. The petitioner was advised to opt for settlement by approaching the Settlement Commission. The petitioner came to learn that a decision was taken to discontinue the Commission. The petitioner challenged the decision before this Court. By Ext.P1 order, this Court directed the fourth respondent to accept the petitioner’s application. Accordingly, he filed an application, as evidenced by Ext.P2

WP(C) NO. 17645 OF 2023 3 acknowledgment. Later, the Bill to discontinue the Commission was made an Act, which also has been challenged before this Court in W.P(C)No.13044/2021 and is pending consideration. Thereafter, the 3rd respondent has issued Ext.P4 order, extending the time limit for filing of application before the Commission till 30.9.2021. Subsequently, by Ext.P5 notification, the third respondent had extended the period from completion of assessment till 30.9.2021. The proceedings got extended by virtue of the above orders passed. Now, the petitioner is being held responsible for the delay in initiation of the proceedings under Section 153A. The fourth respondent was pleased to post the settlement application for hearing on 11.5.2023. During the course of hearing, the 4th respondent has observed that the application is not maintainable in law. The stand of the 4th respondent is untenable. Hence, the writ

WP(C) NO. 17645 OF 2023 4 petition.

3.

Heard; Sri. Anil. D. Nair, the learned Counsel appearing for the petitioner and Sri.Jose Joseph, the learned Standing Counsel appearing for the respondents.

4.

Sri. Jose Joseph, on instructions, submitted that the fourth respondent has heard the petitioner and would consider the question of maintainability of the application as a preliminary issue. The fourth respondent would take decision on the application within four weeks from today. The said submission is recorded. Having considered the pleadings and materials on record and in the light of the submission made by the learned Standing Counsel, I direct the 4th respondent to consider and dispose of the application, in accordance with law and as expeditiously as possible, at any rate,

WP(C) NO. 17645 OF 2023 5 within a period of one month from the date of receipt of a certified copy of the judgment. I make it clear that this Court has not expressed anything on the merits of the application. The writ petition is ordered accordingly. rmm15/6/2023 C.S.DIAS, JUDGE

WP(C) NO. 17645 OF 2023 6

Appendix — schedule of exhibits
APPENDIX OF WP(C) 17645/2023 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE ORDER DATED 09.03.2021 IN WRIT PETITION NO.6035 OF 2021. Exhibit P2 TRUE COPY OF ACKNOWLEDGMENT DATED 25.03.2021 OF RECEIPT OF SETTLEMENT APPLICATION ISSUED BY THE 4 TH RESPONDENT Exhibit P3 TRUE COPY OF INTIMATION IN FORM NO.34BA WAS FILED ON 25.03.2021 BEFORE THE 2 ND RESPONDENT. Exhibit P4 TRUE COPY OF THE NOTIFICATION NO.F.NO.299/22/2021- DIRECTOR(INV.III)/174 DATED 28.09.2021 ISSUED BY THE 3 RD RESPONDENT. Exhibit P5 TRUE COPY OF NOTIFICATION NO.10/2021 DATED 27.2.2021 ISSUED BY THE 3 RD RESPONDENT. Exhibit P6 TRUE COPY OF POSTING NOTICE ISSUED BY THE 4 TH RESPONDENT

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