Rajesh Dhirubhai Gondaliya V. Union of India

SCA/6955/2021

AI Insights

The case involved Rajesh Dhirubhai Gondaliya, the petitioner, who challenged the legality of sub-section (5) of section 245C of the Income-tax Act, 1961, and sought to quash show cause notices issued by the respondent. The petitioner argued that these provisions were violative of fundamental rights under the Constitution of India. The court had earlier granted interim relief and directed the matter for final disposal at the admission stage. However, following a press release from the CBDT allowing taxpayers an opportunity to file settlement applications, the petitioner decided to withdraw the petition.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 816564 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 04-10-2021
• Assessment Year: misc
• Laws Referred To: Article 226 of the Constitution of India, Income-tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: DEVANG VYAS; MAUNA BHATT
• Assessee Lawyers: B S SOPARKAR
• Keywords: Fundamental rights; Interim Board for Settlement; Settlement application; Show cause notices; Writ of Mandamus
• Section: 245C; 245A; 245M

Judgement Text

"C/SCA/6955/2021 ORDER DATED: 04/10/2021 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 6955 of 2021 ========================================================== RAJESH DHIRUBHAI GONDALIYA Versus UNION OF INDIA ========================================================== Appearance: MR B S SOPARKAR(6851) for the Petitioner(s) No. 1,2,3 MR DEVANG VYAS(2794) for the Respondent(s) No. 1 MRS MAUNA M BHATT(174) for the Respondent(s) No. 2 ========================================================== CORAM: HONOURABLE MS. JUSTICE SONIA GOKANI and HONOURABLE MR. JUSTICE RAJENDRA M. SAREEN Date : 04/10/2021 ORAL ORDER (PER : HONOURABLE MS. JUSTICE SONIA GOKANI) 1. Petitioner has preferred this petition under Article 226 of the Constitution of India with following prayers: “7. The petitioners, therefore, prays that this Hon’ble Court be pleased to issue a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ, direction or order and be pleased to: (a) declare that the provisions of sub-section (5) of sec.245C is illegal and violative of fundamental rights guaranteed to the Petitioner under the Constitution of India; (b) Quash and set aside show cause notices issued by the Respondent No.2 dated 09.04.2021, 10.04.2021 and 16.04.2021. (c) Pending the admission, hearing and final disposal of this petition stay operation and implementation of the notices issued by the Respondent No.2 dated 09.04.2021, 10.04.2021 and 16.04.2021 and bar the assumption of jurisdiction by the Respondent No.2. Page 1 of 4 C/SCA/6955/2021 ORDER DATED: 04/10/2021 (d) any other and further relief deemed just and proper be granted in the interest of justice; (e) to provide for the cost of this petition.” 2. The Court, after hearing both the parties, on 02.08.2021 directed the matter to be posted for final disposal at admission stage, continuing the interim relief. 3. Today, we have heard Mr. B.S. Soparkar, learned advocate for the petitioner and Ms. Mauna Bhatt, learned Senior Standing Counsel, for respondent no.2. ] 4. On 07.09.2021 by way of a press release, the Central Board of Direct Taxes (“the CBDT” for short) allowed taxpayers an opportunity to file application for settlement. The same is reproduced as under: “ PRESS RELEASE CBDT ALLOWS TAXPAYERS AN OPPORTUNITY TO FILE APPLICATION FOR SETTLEMENT PRESS RELEASE, DATED 7-9-2021 The Finance Act, 2021 has amended the provisions of the Income-tax Act, 1961 (“the Act”) to inter alia provide that the Income-tax Settlement Commission (“ITSC”) 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 Page 2 of 4 C/SCA/6955/2021 ORDER DATED: 04/10/2021 order to dispose off the pending settlement applications as on 31.01.2021, the Central Government has constituted Interim Board for Settlement (hereinafter referred to as the “Interim Board”), vide Notification no. 91 of 2021 dated 10.08.2021. The taxpayers, in the pending cases, have the option to withdraw their applications within the specified time and intimate the Assessing Officer about such withdrawal. It has been represented that a number of taxpayers were in advanced stages of filing their application for settlement before the ITSC as on 01.02.2021. Further, some taxpayers have approached High Courts requesting that their applications for settlement may be accepted. In some cases, the Hon’ble High Courts have given interim relief and directed acceptance of applications of settlement even after 01.02.2021. This has resulted in uncertainty and protracted litigation. In order to provide relief to the taxpayers who were eligible to file application as on 31.01.2021, but could not file the same due to cessation of ITSC vide Finance Act, 2021, it has been decided that applications for settlement can be filed by the taxpayers by 30th September, 2021 before the Interim Board if the following conditions are satisfied:- i. The assessee was 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. all the relevant assessment proceedings of the assessee are pending as on the date of filing the application for settlement. Such applications, subject to their validity, shall be deemed to be “pending applications” under clause (eb) of section 245A of the Act and shall be disposed of by the Interim Board as per the provisions of the Act. It is clarified that taxpayers who have filed such applications shall not have the option to withdraw such applications as per the provisions of section 245M of the Act. Further, the taxpayers who have already filed application for settlement on or after 01.02.2021 as per the direction of the various Page 3 of 4 C/SCA/6955/2021 ORDER DATED: 04/10/2021 High Courts and who are otherwise eligible to file such application, as per para 3 above, on the date of filing of the said application shall not be required to file such application again. Legislative amendments in this regard shall be proposed in due course.” 5. It emerges now that the Interim Board has been constituted vide Notification No.91 of 2021 on 10.08.2021. The CBDT directed that the taxpayers in the pending cases, have the option to withdraw their applications with the specified time and intimate the Assessing Officer about such withdrawal. 6. Mr. B.S. Soparkar, learned advocate for the petitioner, urges that the applicant before the Settlement Commissioner, as noted by this Court in its first order, had approached on 24.03.2021. There will be no requirement for him to, therefore, prefer any separate application. He be permitted to withdraw this petition in wake of this Notification and the Press Release. 7. Petition stands disposed of. Notice is discharged and interim relief also stands vacated. (MS. SONIA GOKANI, J. ) (RAJENDRA M. SAREEN,J) SUDHIR Page 4 of 4 "