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GOPINATH P.
New Hope Foundation – Appellant
Versus
Union Of India – Respondent
JUDGMENT :
A short, but interesting question arises for consideration in these writ petitions. The question relates to the eligibility of the petitioners in these cases to file applications for settlement in terms of the provisions contained in Section 245C of the Income Tax Act, 1961 (hereinafter referred to as the ‘1961 Act’) following the amendments to the provisions contained in Chapter XIX-A of the 1961 Act by the Finance Act, 2021.
2. The following facts are not in dispute. By virtue of the provisions contained in the Finance Act, 2021, which came into force with effect from 01-04-2021, amendments were made to the provisions of Chapter XIX-A of the 1961 Act, providing inter alia for the abolition of the Income-tax Settlement Commission (hereinafter referred to as ‘the Settlement Commission’) and providing that no application shall be made for settlement before the Settlement Commission on or after 01.02.2021. The amendments were to take effect from 01-02-2021. A search under the provisions of Section 132 of the 1961 Act had taken place in respect of the petitioners in all these cases prior to 01-02-2021. However, the notices following the search were issued to the petitioners u
The court established that rights to file settlement applications under the Income Tax Act remain valid if the search occurred before the abolition of the Settlement Commission.
Eligibility for settlement applications under the Income Tax Act must align with statutory definitions, invalidating any additional conditions imposed by the CBDT.
Retrospective amendments cannot affect vested rights, and valid applications filed before such amendments remain enforceable.
The court established that amendments to the Income Tax Act cannot retroactively invalidate applications filed before the effective date of the amendments, preserving the rights of assessees.
: Assessment – In an application under S.245C of Act, for settlement of applicant's income-tax case, there should be disclosure of income not earlier disclosed before the Assessing Officer
The court established that the CBDT cannot impose additional eligibility conditions for settlement applications beyond what is prescribed in the Income Tax Act.
The Settlement Commission cannot waive or reduce mandatory interest obligations under the Income Tax Act, with interest on undisclosed income calculated from the due tax payment date until the Commis....
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