The Bombay High Court ruled that CBDT is not empowered for extending the cut-off date to make section 245C applications.
The court observed that in Sar Senapati Santaji Ghorpade Sugar Factory Ltd., the Court, considering the provisions of Section 192 of the Act as also the other relevant provisions of the Act, has held that the Notification dated 21st September, 2021 issued by the CBDT under Section 119(2)(b) of the Act, although was issued within the powers as conferred on the CBDT, however, to the extent it laid down additional conditions in Para 4 that the assessee should be eligible to file an application for settlement on 21st January, 2021, was held to be beyond the scope of powers of the CBDT under Section 119 of the Act. The Court observed that there was no provision in the Act empowering the CBDT to impose such eligibility conditions in regard to extending the cut-off date to make an application under Section 245C of the Act. Hence, such condition in the impugned notification which offered the statutory mandate was held to be invalid and bad in law.
The bench further observed that it was held that the assessee in such case, therefore, had become eligible to make an application.
The court said that the order passed by the Interim Board of Settlement rejecting the Petitioner’s application on the ground that the conditions as incorporated in Para 4 of the CBDT’s Order dated 28th September, 2021 issued under Section 119(2)(b) of the Act would become applicable, is required to be held illegal and will be required to be quashed and set aside.
Facts
On 22nd November, 2019, search was conducted at the premises of the Petitioner’s partners. On 23rd March, 2021, notices under Section 153C of the Income Tax Act, 1961 for the Assessment Years 2015-16 to 2019-20 and a notice under Section 143(2) of the Act for the Assessment Year 2020-21 were issued to the Petitioner. In these circumstances, on 25th March, 2021 the Petitioner was entitled to file a Settlement Application for the Assessment Years 2015-16 to 2020-21.
It was contended that the CBDT issued a Press Release, in view of the orders passed by the High Courts informing the public at large that a settlement application could be filed even after 1st February, 2021, being the date when the Finance Bill was introduced.
The Petitioner contended that during the period August 2022 to September 2023, settlement proceedings were conducted by the Interim Board of Settlement constituted by the Central Government vide a Notification dated 10th August, 2021.
Naniwadekar submitted that in view of the decision of the Court in Sar Senapati Santaji Ghorpade Sugar Factory Ltd., the challenge as raised by the Petitioner to the CBDT Order dated 28th September, 2021 would stand concluded.
He also submitted that the effect of such pronouncement of the Court is to the effect that the Petitioner’s application which was refiled by the Petitioner on 27th September, 2021 would be valid, to be so considered by the Respondent.
Case Information
Case Name: M/s. Vishwakarma Developers v/s The Central Board of Direct Taxes and Ors.
Judicial Level & Location : Bombay High Court
Case Number : WRIT PETITION (L) NO.31523 OF 2023
Date of Decision : 24/07/2024
Decision in favor of: Petitioner
Judges: Justice G. S. Kulkarni And Justice Somasekhar Sundaresan
