FRIENDS SPS INTERNATIONAL INDIA (P) LTD. vs. ASSISTANT COMMISSIONER OF INCOME TAX / DEPUTY COMMISSIONER OF INCOME TAX

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CW/3372/2021HC RajasthanRJHC02019121202126 March 2025Author: AVNEESH JHINGAN,MANEESH SHARMA6 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that in view of the CBDT Circular dated 28.09.2021, which extended the time for assessees eligible to file applications for settlement on January 31, 2021, up to September 30, 2021, the issue raised in the writ petitions regarding the acceptance of applications did not require further adjudication. The Court directed the Interim Board to consider the applications made by the petitioners in accordance with law, taking into account the aforementioned circular. The Court explicitly stated that it had not considered the eligibility of the petitioners to make an application under Section 245C at this stage. The operative direction was to consider the applications, implying a remand for consideration by the appropriate authority.

What were the facts?

The petitioners, including Friends SPS International India (P) Ltd. and others, filed writ petitions seeking directions for the Income Tax Settlement Commission (ITSC) to accept their applications. Following a search, notices under Section 153A of the Income Tax Act, 1961, were issued for assessment years 2013-14 to 2018-19. The Finance Act, 2021, amended Section 245B, causing the ITSC to cease operations after February 1, 2021, and introduced an Interim Board for Settlement. The petitioners' applications under Section 245C were initially not accepted. This court had previously directed the respondents to accept the applications as an interim measure, leading the petitioners to file their applications and make pre-deposits on February 26, 2021. The Central Board of Direct Taxes (CBDT) subsequently issued a circular extending the deadline for eligible assessees to file settlement applications.

What were the issues?

1. Whether the petitioners are entitled to have their applications for settlement under Section 245C of the Income Tax Act, 1961, accepted by the Income Tax Settlement Commission (ITSC) or the Interim Board for Settlement, given the amendments brought by the Finance Act, 2021, and the subsequent CBDT circular. Assessee's contention: The petitioners argued that their applications, filed pursuant to an interim direction from the court and within the extended period provided by the CBDT circular, should be accepted and processed. They relied on the court's interim order and the CBDT Circular dated 28.09.2021, which extended the time for filing applications to 30.09.2021. Revenue's contention: The judgment does not record specific arguments from the revenue regarding the acceptance of the applications. However, the context implies the revenue's initial non-acceptance led to the litigation.

Which sections of the Income-tax Act were involved?

Section 153A,Section 245B,Section 245C,Section 245A,Section 119(2)(b)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
[2025:RJ-JP:13797-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No. 3372/2021 1. Friends SPS International India (P) Ltd., Cp-8, Indra Vihar, Kota, 05 Through Authorised Signatory Shailendra Kumar Gupta. 2. Dynamic Fine Papaer Mill (P) Ltd., Spl-3R, Chambal Industrial Area, Kota 03, Through Authorised Signatory Shailendra Kumar Gupta. 3. Dynamic Fincap (P) Ltd., E-20, Opposite Multimetals Chambal Industrial Area, Kota 03, Through Authorised Signatory Shailendra Kumar Gupta. 4. Dynamic Engineers, E-20, Opposite Multematals Chambal Industrial Area, Kota 03 Through Authorised Signatory Shailendra Kumar Gupta. 5. Shailendra Kumar Gupta S/o Shri Madan Mohan Gupta, R/o 205-C, Shivashish Near Dav School, Talwandi, Kota ----Petitioners Versus 1. Assistant Commissioner Of Income Tax / Deputy Commissioner Of Income Tax, Central Circle, Central Revenue, Building, Rawatbhata Road, Kota 2. Income Tax Settlement Commission, 4Th Floor, Lok Nayak Bhavan, New Delhi 110003 3. Union Of India, Through Secretary, Ministry Of Finance, 3Rd Floor, Jeevan Deep Building Sansad Marg, New Delhi 1100001 ----Respondents Connected With D.B. Civil Writ Petition No. 2192/2021 1. Tara Chand Kanoongo S/o Late Shri Shiv Prasad Kanoongo, R/o B-82, Kanoongo Bhawan, Janta Colony, Jaipur. 2. Vikram Kanoongo S/o Shri Late Ghanshyam Kanoongo, R/o B-82, Kanoongo Bhawan, Janta Colony, Jaipur. 3. Ravi Kant Kanoongo S/o Late Shri Shiv Prasad Kanoongo, R/o B-82, Kanoongo Bhawan, Janta Colony, Jaipur. 4. Shashi Kant Kanoongo S/o Late Shri Shiv Prasad [2025:RJ-JP:13797-DB] (2 of 6) [CW-3372/2021] Kanoongo, R/o B-82, Kanoongo Bhawan, Janta Colony, Jaipur. ----Petitioners Versus 1. Deputy Commissioner Of Income Tax, Central Circle I, Ncr Building, Statue Circle, Jaipur. 2. Income Tax Settlement Commission, 4Th Floor, Lok Nayak Bhavan, New Delhi 110003. 3. Union Of India, Through Secretary, Ministry Of Finance, 3Rd Floor, Jeevan Deep Building, Sansad Marg, New Delhi 110001. ----Respondents D.B. Civil Writ Petition No. 3543/2021 Alok Kumar Gupta S/o Nathu Lal Gupta, Aged About 44 Years, R/o S-55, Adinath Nagar, Jln Marg, Jaipur ----Petitioner Versus 1. Deputy Commissioner Of Income Tax, Central Circle-1, Ncr Building, Statue Circle, C-Scheme, Jaipur. 2. Income Tax Settlement Commission, 4Th Floor, Lok Nayak Bhavan, New Delhi 110003 3. Union Of India, Through Secretary, Ministry Of Finance 3Rd Floor, Jeevan Deep Building, Sansad Marg, New Delhi, 110001 ----Respondents D.B. Civil Writ Petition No. 5095/2021 Vishnu Kumar Gupta S/o Sh. Ram Gopal, Aged About 38 Years, Having Its Address At 1347, Barkat Nagar, Tonk Phatak, Jaipur 302015 ----Petitioner Versus 1. Deputy Commissioner Of Income Tax, Central Cirlce 1, New Central Revenue Building, Statue Circle, Jaipur 302001 2. Income Tax Settelment Commission, 4Th Floor, Lok Nayak Bhavan, New Delhi 110003 [2025:RJ-JP:13797-DB] (3 of 6) [CW-3372/2021] 3. Union Of India, Through Secretary, Ministry Of Finance, 3Rd Floor, Jeevan Deep Building, Sansad Marg, New Delhi, 110001 ----Respondents For Petitioner(s) : Mr. Gunjan Pathak with Mr. Aditya Bohra Mr. Kanishk Singhal Mr. Siddharth Ranka with Mr. Rohan Chatter and Ms. Apeksha Bapna For Respondent(s) : Mr. Ashish Kumar with Mr. Devesh Yadav and Mr. Chinmay Sharma for Mr. R.D. Rastogi,ASG Mr. Siddharth Bapna with Mr. Meyhul Miittal HON'BLE MR. JUSTICE AVNEESH JHINGAN HON'BLE MR. JUSTICE MANEESH SHARMA

Order 26/03/2025 AVNEESH JHINGAN, J (ORAL):

1.

These petitions are being decided by common order as the facts involved are similar. For convenience, the facts are being taken from D.B. Civil Writ Petition No.2192/2021. 2. This petition is filed seeking directions to respondent No.2- Income Tax Settlement Commission to accept the application of the petitioners.

3.

The brief facts are that in pursuance to a search conducted, petitioners were issued notices dated 20.03.2020 under Section 153A of the Income Tax Act, 1961 (for short ‘the Act’) relating to assessment years 2013-14 to 2018-19. By the Finance Act of 2021, provision of Section 245B was amended and proviso was added to the effect that Income-tax Settlement Commission so

[2025:RJ-JP:13797-DB] (4 of 6) [CW-3372/2021] constituted u/s 245B of the Act shall cease to operate after 01.02.2021. Section 245A was amended and clauses were added. By insertion of Section 245AA, Interim Board for Settlement (for short ‘Interim Board’) was to be constituted for settling the pending applications. The petitioners filed this writ petition pleading that the application filed u/s 245C of the Act was not accepted by the department consequent to Finance Act of 2021. Vide order dated 22.02.2021, respondents were directed to accept the application as an interim measure. In pursuance to the interim direction issued by this Court, the petitioners on 26.02.2021 filed an application u/s 245C of the Act and made required pre-deposit. In view of the amendment brought by Finance Act, 2021 and prevailing COVID-19 situation, Central Board of Direct Taxes (for short ‘the Board’) issued Circular dated 28.09.2021 u/s 119(2)(b) wherein, time for assessees eligible to make application for settlement on 31.01.2021 was extended upto 30.09.2021. Circular is reproduced below:- “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, 2021 has amended the provisions of the Act to inter alia provide that the Income-tax Settlement Commission (lTSC) 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 off the pending settlement applications as on 31.01.2021, the Central Government has constituted Interim Board for Settlement

[2025:RJ-JP:13797-DB] (5 of 6) [CW-3372/2021] (hereinafter referred to as the “Interim Board”), vide notification No. 91 of 2021 dated 10.08.2021. 2. Meanwhile, in order to avoid genuine hardship to number of taxpayers who were in the advanced stages of filing their application for settlement before the ITSC as on 01.02.2021 and also due to the hardship faced during the covid pandemic by the tax payers, the Central Board of Direct Taxes (referred to as the “Board”) had provided relief vide Press Release dated 07.09.2021 thereby allowing assessees eligible to file application for settlement on 31.01.2021 to file such applications till the extended period of 30.09.2021. 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.

4.

The above relaxation is available to the applications filed:- (i) by the assessees who were eligible to file application for settlement on 31.01.2021 for the assessment years for which the application is sought to be filed (relevant assessment years); and (ii) where the relevant assessment proceedings of the assessee are pending as on the date of filing the application for settlement.

5.

The Hindi version of the order shall follow.

xxx xxx xxx”

4.

In view of the circular, the issue raised in this petition needs no further adjudication. We may hasten to say that, at this stage, we have not considered the eligibility of the petitioners to make an application u/s 245C of the Act.

[2025:RJ-JP:13797-DB] (6 of 6) [CW-3372/2021]

5.

Taking into account that time period for making application before Interim Board was extended upto 30.09.2021 prior to which petitioners filed the application. The writ petitions are disposed of with direction to the Interim Board to consider the application made by the petitioners in accordance with law taking into consideration circular dated 28.09.2021. 6. It is clarified that in view of the circular issued, we need not dilate upon other issues raised in the writ petition. (MANEESH SHARMA),J (AVNEESH JHINGAN),J Simple Kumawat /63,64,66 & 67 Whether Reportable: Yes/No

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