The Delhi High Court ruled that Section 245C (1) application under the Income Tax Act is not maintainable in the absence of a case for the relevant Assessment years (AY).
The petitioner, Bishan Das Goyal HUF filed the present petition impugning an order passed by the Income Tax Settlement Commission under Section 245D(1) of the Income Tax Act, 1961 to the limited extent that the settlement application under Section 245C(1) of the Income Tax Act was held to be invalid for the Assessment Years 2012-13, 2013-14 and 2014-15.
The Commission had concluded that there were no proceedings for assessment, relating to the petitioner, pending under the Act in respect of the said assessment years and thus, there was no case relating to the petitioner in respect of the said assessment years. Therefore, the application under Section 245C(1) of the Act would not be maintainable in respect of the said assessment years.
Thus, the question that falls for consideration of the Court was whether the Commission had erred in rejecting the petitioner’s application under Section 245C(1) of the Income Tax Act in respect of the Assessment Years 2012-13, 2013-14 and 2014-15.
The Two-Judge Bench of the Delhi Court comprising Justice Vibhu Bakhru and Justice Amit Mahajan observed that “A plain reading of Explanation (i) to Clause (b) of Section 245A of the Income Tax Act clearly indicates that the proceedings in relation to assessment or reassessment or re-computation under Section 147 of the Income Tax Act had not commenced in respect of the Assessment Years 2012- 13, 2013-14 and 2014-15.”
The Bench concluded by stating that “We find no infirmity with the decision of the Commission that the petitioner’s application under Section 245C of the Income Tax Act in respect of the said assessment years, was not maintainable.”
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