M/S SONA TRADERS, vs. INCOME TAX SETTLEMENT COMMISSION AND ORS

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WP/4401/2008HC BombayHCBM01015912200825 January 2010Bench: HON'BLE SHRI JUSTICE DR. D.Y. CHANDRACHUD,HON'BLE SHRI JUSTICE J.P. DEVADHAR2 pages
AI SummaryRemanded

What did the High Court hold?

The High Court directed the Income Tax Settlement Commission (ITSC), Mumbai, to hear and dispose of the petitioner's application under section 245C(1) on merits. This direction was based on the High Court's prior judgment in Star Television News Limited V/s. Union of India. The Court clarified that the issue of whether the petitioner had failed to cooperate with the ITSC in the disposal of proceedings was not decided by the High Court and was expressly left open for the ITSC to decide on facts. The submissions made before the High Court could be urged before the ITSC and would be considered in accordance with law. No further relief was sought or granted at the hearing of the petition.

What were the facts?

The petitioner, M/s. Sona Trader, filed a writ petition before the Bombay High Court challenging an action by the Income Tax Settlement Commission (ITSC), Mumbai. The petitioner had filed an application under section 245C(1) of the Income Tax Act, 1961. The primary grievance was the delay in the disposal of this application, with the first hearing before the Settlement Commissioner scheduled for November 20, 2007, despite the application being filed on March 17, 1997. The petitioner sought a direction from the High Court to the ITSC to hear and decide their application on merits.

What were the issues?

1. Whether the High Court should direct the Income Tax Settlement Commission to hear and decide the petitioner's application under section 245C(1) on merits? (Question of law and fact, concerning the interpretation and application of sections 245HA and 245D(4A) of the Income Tax Act, 1961). Assessee's Contention: The petitioner argued that in light of the Bombay High Court's judgment in Star Television News Limited V/s. Union of India (2009) 27 DTR 50 (Bom), the only relief sought was a direction to the ITSC to hear and decide their application under section 245C(1) on merits. They submitted that the delay in hearing was significant. Revenue's Contention: The judgment does not record any specific contentions from the revenue regarding the merits of the petitioner's application or the delay. However, the court noted that the question of whether there was a lapse on the part of the petitioner in cooperating with the first respondent in the disposal of the proceedings was kept open to be decided by the first respondent.

Which sections of the Income-tax Act were involved?

Section 245C(1),Section 245HA,Section 245D(4A)

AI-generated summary — verify with the full judgment below

1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.4401 OF 2008 M/s. Sona Trader ..Petitioner. V/s. Income Tax Settlement Commission, Mumbai & Ors. ..Respondents. Mr. N.M. Porwal for petitioner. Mr. Suresh Kumar for respondents 2 & 3. CORAM : DR. D.Y.CHANDRACHUD AND J.P.DEVADHAR, JJ.

DATED : 25TH JANUARY, 2010 P.C. :-

1.

The learned counsel appearing on behalf of the petitioner has stated before the Court that in view of the judgment of a Division Bench of this Court in Star Television News Limited V/s. Union of India (2009) 27 DTR 50 (Bom), the only relief which is now sought is a direction to hear and decide the application made by the petitioner under section 245C(1) of the Income Tax Act, 1961 on merits. In view of the judgment of the Division Bench construing the provisions of section 245HA and section 245D(4A), it would be appropriate and proper for this Court to direct the first respondent to hear and dispose of the application made by the petitioner under section 245C(1) on merits. We clarify that the question as to whether there was a lapse on the part of the petitioner in cooperating with the first respondent in

2 the disposal of the proceedings is kept open to be decided on facts by the first respondent. Learned counsel for the petitioner submits that in the present case, the first hearing before the Settlement Commissioner was fixed on 20th November, 2007 though the application was filed on 17th March, 1997. As already noted above, we have not expressed any view, one way or the other, on the question as to whether the petitioner had failed to cooperate with the first respondent in the disposal of the proceedings. The submissions urged before us can be urged before the first respondent and if urged, will be considered in accordance with law. 2. In view of the aforesaid directions, no further relief has been sought at the hearing of the petition, which shall accordingly stand disposed of. There shall be no order as to costs. (J.P.DEVADHAR, J.) (DR. D.Y.CHANDRACHUD, J.)

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