DHANLAXMI ELECTRICALS PRIVATE LTD vs. INCOME TAX SETTLEMENT COMMISSION AND ORS

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WP/2671/2021HC BombayHCBM01023566202104 December 2021Author: HON'BLE SHRI JUSTICE K.R. SHRIRAM,HON'BLE SHRI JUSTICE AMIT BORKAR2 pages
AI SummaryRemanded

What did the High Court hold?

The High Court disposed of the writ petition. The Court noted the petitioner's submission regarding the CBDT's order dated September 28, 2021, which allows for the admission and processing of settlement applications filed after January 31, 2021, but before September 30, 2021, by specific authorities. The revenue's representative suggested that the petitioner should raise all these points concerning their eligibility in their application to the Settlement Interim Board. The Board would then consider the case and pass an order in accordance with the law, provided other conditions are met. The Court did not make a determination on the merits of the petitioner's eligibility but directed that the matter be considered by the Settlement Interim Board based on the submissions made.

What were the facts?

The petitioner, Dhanlaxmi Electricals Private Limited, filed a settlement application for Assessment Year 2019-20 on March 5, 2021. An assessment order was passed on June 28, 2021. The petitioner contended they were eligible to file the application by January 31, 2021. The Income Tax Settlement Commission (ITSC) and other respondents are the authorities involved. The matter is before the Bombay High Court in Writ Petition No. 2671 of 2021. The Central Board of Direct Taxes (CBDT) issued an order on September 28, 2021, authorizing Commissioners of Income-tax posted as Secretary to the Settlement Commission prior to February 1, 2021, to admit settlement applications filed after January 31, 2021, but before September 30, 2021, and treat them as valid pending applications.

What were the issues?

1. Whether the petitioner's settlement application, filed on March 5, 2021, for AY 2019-20, is valid and can be processed as a pending application, considering the CBDT's order dated September 28, 2021, and the statutory deadline of January 31, 2021, under Section 245C(5) of the Income-tax Act, 1961. Assessee's Contention: The petitioner argues that they are eligible to file their settlement application, which was filed on March 5, 2021, and that the CBDT's order dated September 28, 2021, provides a mechanism to consider such applications filed after January 31, 2021, but before September 30, 2021. They were otherwise eligible to file by January 31, 2021. Revenue's Contention: The respondents (ITSC and others) state that the petitioner may raise all relevant points regarding their eligibility in their application to the Settlement Interim Board. They further state that the Board will consider the petitioner's case and pass an order in accordance with law, subject to other conditions being fulfilled.

Which sections of the Income-tax Act were involved?

Section 119,Section 245C,Section 245A

AI-generated summary — verify with the full judgment below

1/2 920.WP-2671-2021.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.2671 OF 2021 Dhanlaxmi Electricals Private Limited ….Petitioner V/s. Income Tax Settlement Commission Mumbai & Ors.

….Respondents ---- Mr. Ajay Singh i/b. Mr. Sameer Dalal for petitioner. Mr. Sham V. Walve for respondents. ---- CORAM : K.R. SHRIRAM & AMIT B. BORKAR, JJ.

DATED : 4th DECEMBER 2021 P.C. : 1 Mr. Ajay Singh tenders a copy of Order dated 28th September 2021 issued by CBDT bearing F. No.299/22/2021-Dir (Inv. III)/174 in which paragraph 3 reads as under :- “3. In view of the above, the Board in exercise of its power under clause (b) of sub-section (2) of section 119 of the Income-tax Act, 1961 (the Act), in order to avoid genuine hardship to assessees authorizes the Commissioner of Income-tax, posted as Secretary to the Settlement Commission prior to 01.02.2021, to admit an application for settlement on behalf of the Interim Board filed after 31.01.2021, which is the date mentioned in sub-section (5) of section 245C of the Act for filing such application, and before 30.09.2021 and treat such applications as valid and process them as “pending applications” as defined in clause (eb) of section 245A of the act.” 2 It is stated in the petition that petitioner has filed Settlement Application for A.Y. 2019-20 on 5th March 2021. Mr. Singh states that in this case, the assessment order has been passed on 28th June 2021 but he was otherwise eligible to file application for settlement on 31st January 2021. Gauri Gaekwad GAURI AMIT GAEKWAD GAURI AMIT GAEKWAD Date: 2021.12.06 14:50:47 +0530

2/2 920.WP-2671-2021.doc 3 Mr. Walve states that petitioner may raise all these points in their application to explain their eligibility. Mr. Walve further states that petitioner may clarify these points in their application and the Settlement Interim Board will consider petitioner's case and pass order in accordance with law, subject to other conditions also being fulfilled.

Petition disposed. (AMIT B. BORKAR, J.) (K.R. SHRIRAM, J.) Gauri Gaekwad

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