In a recent ruling, the Madras High Court observed that the retrospective date to apply for the Settlement before the Interim Board for Settlement under Section 245C(5) of Income Tax Act, 1961 shall be March 31, 2021 and not 1st February 2021.
An order dated 27.12.2023 of the Interim Board for Settlement is challenged in this writ petition on the ground that such order was issued without taking notice of the judgment of the Division Bench of this Court in a batch of writ petitions, where the lead case is M/s. Jain Metal Rolling Mills v. Union of India (Jain Metal Rolling Mills) 17.11.2023
The petitioner had applied to the Interim Board for Settlement for multiple assessment years ranging from 2014-15 to 2020-21. While the application was accepted for the years 2014-15 to 2019-20, it was considered invalid for the assessment year 2020-21 due to the non-filing of the income tax return by 31.01.2021.
Counsel for the petitioner highlighted that the Interim Board for Settlement had concluded that there was no deemed pendency as per clause (iv) of the Explanation to Section 245A of the Income Tax Act, 1961.
However, the Division Bench had ruled that applications for cases arising between 01.02.2021 and 31.03.2021 should be deemed pending. This decision was reiterated in a subsequent judgment of the Division Bench in Ashwini Fisheries Pvt. Ltd. v. Principal Commissioner of Income Tax and Ors., dated 26.03.2024.
The operative portion of the judgment of the Division Bench of this Court reads as under:-
“ 42. In the result, these writ petitions are partly allowed and are disposed off on the following terms :-
(i) Section 245C(5) of the Income Tax Act, 1961 (as amended by the Finance Act, 2021) is read down by removing the retrospective last date of 1st date of February, 2021 as 31st day of March, 2021;
(ii) Consequently the last date of eligibility mentioned paragraph 4(i) of the impugned circular dated 28.09.2021 shall also be read as 31.03.2021; …..”
The Court noted that the judgment of the Division Bench had not been brought to the attention of the Interim Board for Settlement.
Accordingly, a Single bench of Justice Senthilkumar Ramamoorthy set aside the impugned order concerning the application for the assessment year 2020-21 and remanded the matter to the Interim Board for reconsideration in light of the Division Bench’s judgment. The Board was directed to expedite the proceedings, preferably within three months from the date of receiving the Court’s order.
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