M/S SHANTI CONSTRUCTION V. INCOME TAX SETTLEMENT COMMISSION, ADDITIONAL BENCH II

SCA/4969/2021

AI Insights

In this case, M/S Shanti Construction filed a petition under Article 226 of the Constitution, seeking a writ of mandamus against the Income Tax Settlement Commission. The petitioners argued that the Settlement Commission had concluded the hearings and settled the case but had not issued the formal order under section 245D(4) of the Income Tax Act, 1961. The respondents, representing the Income Tax Department, contended that the facts could only be verified by the Settlement Commission. The court, after considering the submissions and the procedural history, directed the Settlement Commission to issue the formal order if the facts stated by the petitioners were found to be correct.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 763913 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 25-03-2021
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: MANISH BHATT; MAUNA BHATT; KARAN SANGHANI
• Assessee Lawyers: B S SOPARKAR; BANDISH SOPARKAR
• Keywords: Settlement under section 245D; Writ of Mandamus; Formal order issuance
• Section: 245D(4)

Judgement Text

"C/SCA/4969/2021 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 4969 of 2021 ========================================================== M/S SHANTI CONSTRUCTION Versus INCOME TAX SETTLEMENT COMMISSION, ADDITIONAL BENCH II ========================================================== Appearance: MR B S SOPARKAR(6851) for the Petitioner(s) No. 1 for the Respondent(s) No. 1,2 ========================================================== CORAM: HONOURABLE THE CHIEF JUSTICE MR. JUSTICE VIKRAM NATH and HONOURABLE MR. JUSTICE BHARGAV D. KARIA Date : 25/03/2021 ORAL ORDER (PER : HONOURABLE THE CHIEF JUSTICE MR. JUSTICE VIKRAM NATH) 1. We have heard Shri S.N.Soparkar, learned Senior Counsel assisted by Mr. Bandish Soparkar learned counsel for the petitioners, Shri Manish Bhatt, learned Senior Advocate assisted by Mrs. Mauna Bhatt and Mr. Karan Sanghani learned counsels representing respondent No.2. 2. By means of this petition under Article 226, the petitioners have in effect prayed for the writ of mandamus commanding the respondent No.1 to pass an order under section 245D(4) of the Income Tax Act, 1961 in accordance with law. Page 1 of 4 C/SCA/4969/2021 ORDER 3. The submission of Shri Soparkar learned Senior Counsel appearing for the petitioners is that upon filing application for settlement under section 245D, the proceedings took place and thereafter, arguments were also heard finally by the respondent No.1- Settlement Commission on 05.01.2021, and 27.01.2021. The arguments were concluded. The respondent No.1 formally pronounced the case as settled and also noted the terms of settlement. However, the only text of the order under section 245D(4) of the Act, 1961 was pending to be issued which has not been done till date. Such averments are contained in paragraphs 2.5 and 3.8 of the petition which are reproduced below: “2.5 Final hearing of the settlement of the case of the Petitioners took place on 04.01.2021, 05.01.2021 and 28.01.2021 and the arguments and hearing were concluded. The Respondent No.1 also formally pronounced the case as settled and also noted the terms of settlement. Only the text of the order u/s 245D(4) was pending to be issued. But, the Petitioners did not receive the same until 31.01.2021. Pronouncement of decision after completion of hearing 3.8 It is submitted that in the facts of the case complete bi- parte hearing has taken place putting all the evidence and arguments on the record. The Respondent No.1 has also formally concluded th hearing and the case is declared to be finally settled in the presence of both the parties. The terms of such settlements are also noted by the Respondent No.1. It is therefore submitted that the issuance of the formal order in writing now is a procedural requirement and not substantive adjudication that has already completed. It is therefore Page 2 of 4 C/SCA/4969/2021 ORDER submitted that such procedural requirement cannot be stalled by the subsequent amendment which has also not come into effect.” 4. In the above facts and circumstances, Shri Soparkar has prayed for an appropriate mandamus being issued to the respondent No.1-the Settlement Commission to issue formal orders. 5. On the other hand, Shri Manish Bhatt learned Senior Counsel appearing for respondent No.2-the Assistant Commissioner of Income Tax submits that as the facts stated by the petitioners can only be verified by the Settlement Commission, it may be left at the discretion of the Settlement Commission to take a decision whether such facts are correct or not and accordingly, the Settlement Commission may proceed with the matter. We have also been taken to the contents of the Finance Bill 2020- 21 and the relevant provisions therein but as the said Bill has still not been enacted, the position which stands is to be taken as in the absence of the contents of the said Bill. 6. Considering the above facts and circumstances, we dispose of this petition with the direction to the respondent No.1- Settlement Commission to consider the facts as stated by the petitioner and as recorded in the above order and if they are found to be correct, it may proceed to pass/issue appropriate formal orders on or before 31.03.2021 and if such facts are not Page 3 of 4 C/SCA/4969/2021 ORDER found to be correct, the Commission would be free to proceed in accordance with law in its own wisdom and discretion. Direct service is permitted. (VIKRAM NATH, CJ) (BHARGAV D. KARIA, J) JYOTI V. JANI Page 4 of 4 "