M/S MEHTA STONE POLISHERS AND ANR V. ASST COMMISSIONER OF INCOME TAX

CW/2570/2017

AI Insights

The case involves M/s Mehta Stone Polishers and its partner Shri Rajendra Kumar Mehta, who challenged the order of the Income Tax Settlement Commission dismissing their application due to the failure to reconstruct the file. The initial writ petition challenged the validity of Section 245HA of the Income Tax Act, 1961, which was amended to provide for automatic abatement of applications if no final order was passed by a certain date. The High Court had previously directed the Commission to decide the application, considering whether any delay was attributable to the applicants. However, the Commission dismissed the application without proper communication to the applicants, leading to the current writ petition.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 756230 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 19-03-2025
• Assessment Year: misc
• Other Referred Cases: Union of India Vs. Star Television News Ltd.: (2015) 12 SCC 665, Union of India Vs. Star Television News Ltd. (2009) 317 ITR 66
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: SIDDHARTH BAPNA; MEYHUL MIITTAL
• Assessee Lawyers: RAJAT SHARMA; AKSHAY SHARMA
• Keywords: Income tax settlement commission; Jurisdiction change; Automatic abatement; Record reconstruction
• Section: 245HA

Judgement Text

"[2025:RJ-JP:12383-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No. 2570/2017 1. M/s Mehta Stone Polishers, Through Its Partner Shri Rajendra Kumar Mehta S/o Shri Abhay Kumar Jain, M/s Chunni Lal Motilal Sarraf, Main Market, Jhalrapatan, Dist. Jhalawar 2. Rajendra Kumar Mehta S/o Shri Abhay Kumar Jain, M/s Chunni Lal Motilal Sarraf, Main Market, Jhalrapatan, Dist. Jhalawar ----Petitioners Versus Asst. Commissioner Of Income Tax, Central Circle, Kota Rajasthan ----Respondent For Petitioner(s) : Mr.Rajat Sharma & Mr.Akshay Sharma for Mr.Sanjay Jhanwar, Sr. Adv. For Respondent(s) : Mr.Siddharth Bapna with Mr.Meyhul Miittal HON'BLE MR. JUSTICE AVNEESH JHINGAN HON'BLE MR. JUSTICE MANEESH SHARMA Order 19/03/2025 AVNEESH JHINGAN, J (ORAL):- 1. This petition is filed challenging the order dated 15.12.2016 passed by the Income Tax Settlement Commission (for brevity ‘the Commission’) dismissing the application filed by the petitioners. 2. The brief facts are that the petitioners initially filed a writ petition D.B. W.P. (Civil) No.13135/2008 titled as M/s Mehta Stone Polishers & Ors. Vs. Union of India & Ors. challenging the validity of the provisions of Section 245HA of the Income Tax Act, 1961 (for short ‘the Act’) as inserted by the Finance Act, 2007. The amended provision provides for automatic abatement of [2025:RJ-JP:12383-DB] (2 of 5) [CW-2570/2017] the application filed before the Settlement Commission in case no final order is passed before 31.03.2008. The writ petition was disposed of on 25.04.2016. The operative part of the order is quoted below:- “Counsel for the petitioners submits that the issue involved in these writ petitions has been dealt with by the Apex Court in the case of Union of India Vs. Star Television News Ltd.: (2015) 12 SCC 665. In the light of the aforesaid judgment, the matter has to be remitted to the Settlement Commission. We have considered the submissions made by counsel for the parties. It is admitted by counsel for both the parties that the issued raised and decided by the Bombay High Court was challenged before the Apex Court in the case of Union of India Vs. Star Television News Ltd. (supra). The Apex Court approved the judgment of the Bombay High Court in said case reported in (2009) 317 ITR 66. Para 59 of the judgment of Bombay High Court in the case (supra) is relevant, thus quoted here under:- “59. From the above discussion having arrived at a conclusion that fixing the cut off date as March 31, 2008, was arbitrary the provisions of Section 245HA(1)(iv) to that extent will be also [2025:RJ-JP:12383-DB] (3 of 5) [CW-2570/2017] arbitrary. We have also held that it is possible to read down the provisions of Section 245HA(1)(iv) in the manner set out earlier. This recourse has been taken in order to avoid holding the provisions as unconstitutional. Having so read, we would have to read Section 245HA(1)(iv) to mean that in the event the application could not be disposed of for any reasons attributable on the part of the applicant who has made an application under Section 245C. Consequently, only such proceedings would abate under Section 245HA(1) (iv).Considering the above, the Settlement Commission to consider whether the proceedings had been delayed on account of any reasons attributable on the part of the Applicant. If it comes to the conclusion that it was not so, then to proceed with the application as if not abated. Respondent No. 1 if desirous of early disposal of the pending applications, to consider the appointment of more Benches of the Settlement Commission, more so at the Benches where there is [2025:RJ-JP:12383-DB] (4 of 5) [CW-2570/2017] heavy pendency like Delhi and Mumbai.” In view of the direction, quoted above, these writ petitions are to be governed by the judgment in the case (supra). The Settlement Commission would consider the issue of delay and if not attributable to the applicant, it would complete the proceedings within a period of six months from the date of receipt of copy of this order. With the aforesaid, the writ petitions stand disposed of.” 3. In pursuance to the directions of this Court, the matter was taken up by the settlement commission and it was recorded that earlier the jurisdiction was with the Principal Bench, New Delhi which was later changed but no record was transferred. In an inter-se communication between two benches of the commission, it was informed that the record is not available and the files be reconstructed. On failure of the applicants to reconstruct the file, the application was dismissed holding that the applicants were not interested in pursuing their matters and the commission is unable to decide as to whether delay is attributable to applicants or not. 4. Heard learned counsel for the parties and perused the pleadings. 5. From the order of the commission, it is evident that no communication was sent to the applicants for reconstruction of the record or supplying copies of the application along-with the [2025:RJ-JP:12383-DB] (5 of 5) [CW-2570/2017] documents relied upon, only an attempt was was made by the department to reconstruct the file without involving the applicants. 6. The mode adopted by the commission, the petitioner has been left remediless, without any fault and inspite of directions of this Court to the commission to decide the application. 7. The impugned order is set aside and the matter is remitted back to the commission to decide the application. The writ petition is allowed. 8. The applicants are directed to appear before the Authority concerned on 21.04.2025. (MANEESH SHARMA),J (AVNEESH JHINGAN),J Monika/58 Whether Reportable: No "