MAHAVIR INDUCTOMELT PVT. LTD. vs. INCOME TAX SETTLEMENT COMMISSION

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SCA/10108/2008HC GujaratGJHC24017206200807 August 2008Author: HONOURABLE MR. JUSTICE K.A.PUJ,HONOURABLE MR. JUSTICE BANKIM.N.MEHTA7 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the petition, finding no substance in it. The Court observed that the petitioner filed their written submissions after a period of three months, which was not within a reasonable time. The ITSC passed its order on January 24, 2007, before the petitioner filed their written submissions. Consequently, there was no occasion for the ITSC to consider the submissions or provide a rebuttal or further hearing. The Court also noted that other aspects raised by the petitioner were considered by the ITSC in its orders dated January 24, 2007, and January 9, 2008. The Court concluded that no case was made out for interference under Article 226 of the Constitution of India.

What were the facts?

The petitioner, Mahavir Inductomelt Pvt. Ltd., filed a Special Civil Application under Article 226 of the Constitution of India challenging two orders passed by the Income Tax Settlement Commission (ITSC) on January 24, 2007, and January 9, 2008. The petitioner sought to quash these orders and requested the ITSC to pass a fresh order under Section 245D(4) of the Income Tax Act, 1961, after considering their submissions and providing a hearing. A search was conducted on September 20, 1995, and the petitioner filed a settlement application on September 27, 1996. The ITSC admitted the application and passed an order under Section 245D(1) on May 26, 1998. Final hearing was fixed for November 10, 2006. The petitioner claims to have filed written submissions on February 12, 2007, after the ITSC had already passed its order on January 24, 2007.

What were the issues?

1. Whether the Income Tax Settlement Commission erred in passing an order under Section 245D(4) of the Income Tax Act, 1961, without considering the written submissions filed by the petitioner? Assessee's contention: The petitioner argued that they filed their written submissions on February 12, 2007, and had not yet received the ITSC's order dated January 24, 2007. They believed the order had not been passed and were under the impression that they could still file their submissions. They also contended that the ITSC rejected their miscellaneous application pointing out this defect and the non-consideration of their submissions. Revenue's contention: The judgment does not record any specific contentions from the Revenue.

Which sections of the Income-tax Act were involved?

Section 245C,Section 245D,Section 245D(1),Section 245D(4),Section 220(2),Section 158BC

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
SCA/1010820/2008 1/7 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 10108 of 2008 For Approval and Signature: HONOURABLE MR.JUSTICE K.A.PUJ HONOURABLE MR.JUSTICE BANKIM.N.MEHTA ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= MAHAVIR INDUCTOMELT PVT. LTD. - Petitioner(s) Versus INCOME TAX SETTLEMENT COMMISSION - Respondent(s) ========================================================= Appearance : MR RK PATEL for Petitioner(s) : 1, None for Respondent(s) : 1, ========================================================= CORAM : HONOURABLE MR.JUSTICE K.A.PUJ and HONOURABLE MR.JUSTICE BANKIM.N.MEHTA Date : 07/08/2008

ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE K.A.PUJ)

SCA/1010820/2008 2/7

1.

The petitioner has filed this petition under Article 226 of the Constitution of India praying for quashing and setting aside the orders passed by the Settlement Commission on 24.1.2007 and 9.1.2008 and seeking direction to the Settlement Commission to pass denovo order under Section 245D(4) of the Income Tax Act, 1961 after considering the petitioner's submission dated 12.2.2007 filed in accordance with the permission of the Settlement Commission and after giving opportunity of hearing to the petitioner as well as the Revenue. The petitioner has also prayed for the direction to the Settlement Commission for passing appropriate orders in the case of the petitioner Company in consonance with the orders passed by the Settlement Commission in the case of Directors on similar facts and circumstances of the case by directing the Settlement Commission to compute the unaccounted sales

SCA/1010820/2008 3/7 as undisclosed income by granting deduction of cost of purchase price and taxing the net income and further directing to pass specific order on levy of interest under Section 220(2) of the Income Tax Act, 1961. 2. It is the case of the petitioner that search took place on 20.9.1995. The petitioner filed its return for the block period on 22.5.1996. Thereafter, the petitioner filed Settlement Application under Section 245C(1) of the Income Tax Act, 1961 on 27.9.1996. The Assessing Officer passed an order under Section 158BC of the Income Tax Act, 1961 for the block period on 30.9.1996. The application was admitted by the Settlement Commission and order was passed under Section 245D(1) of the Income Tax Act, 1961 on 26.5.1998. Final hearing was fixed by the Settlement Commission under Section 245D(4) of the Act on 10.11.2006. It is the case of the petitioner that the SCA/1010820/2008 4/7 petitioner has to file written submissions, but before written submissions were filed the order was passed under Section 245D(4) on 24.1.2007 whereas the written submissions were filed by the petitioner on 12.2.2007. The grievance of the petitioner was that there was no specific time limit for filing the written submissions and the petitioner was given to understand that the copy of the written submissions should be served on the department and if there is any rebuttal the same should also be filed by the department thereafter in the matter.

3.

Mr.R.K.Patel, learned advocate appearing for the petitioner submits that the petitioner filed written submissions on 12.2.2007, by that time copy of the order passed by the Settlement Commission on 24.1.2007 was not received by the petitioner and hence the petitioner was under the belief that the order was not passed. He has,

SCA/1010820/2008 5/7 therefore, submitted that the impugned order is passed by the Settlement Commission without considering the written submission.

4.

Mr.Patel further submitted that the petitioner has moved Misc. Application pointing out defects in the order and also pointing out that the written submissions were not considered. The said application is also rejected. The petitioner has, therefore, filed present petition before this Court.

5.

Having heard learned advocate for the petitioner and having considered the averments made in the petition as well as documents attached therewith, we are of the view that there is no substance in the present petition. First of all, the petitioner has filed written submissions after the period of three months. If the Settlement Commission has directed the SCA/1010820/2008 6/7 petitioner to file written submissions the same should have been filed within reasonable time period. The Settlement Commission passed an order on 24.1.2007, before that written submissions were not filed by the petitioner. Since the written submissions were not filed there is no question of rebuttal and there is also no question of giving any further hearing in the matter. All other aspects raised by the petitioner in the present petition are considered by the Settlement Commission in its order dated 24.1.2007 as well as subsequent order passed in Misc. Application.

6.

Looking to the facts and circumstances of the case and considering the scope and jurisdiction of this Court under Article 226 of the Constitution of India, we are of the view that no case is made out by the petitioner to interfere in the order passed by the settlement commission. We, therefore,

SCA/1010820/2008 7/7 dismiss this petition at the threshold.

(K. A. PUJ, J.) (B. N. MEHTA, J.) kks

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