Eligibility for settlement applications under the Income Tax Act must align with statutory definitions, invalidating any additional conditions imposed by the CBDT.

JUDGMENT :

Dr. A.K. Jayasankaran Nambiar, J.

These Writ Appeals preferred by the Revenue impugn the common judgment dated 22.08.2024 of a learned Single Judge in the writ petitions.

The brief facts:

2. The writ petitions in question were filed by assessees under the Income Tax Act, 1961 [hereinafter referred to as the “I.T. Act”], aggrieved by the order of the Interim Board for Settlement that rejected the applications preferred by them for settlement of their cases in accordance with the provisions of Chapter XIX-A of the I.T. Act. The reason cited by the Interim Board for Settlement for rejecting the applications was that, although the applications for settlement had been filed on or before 30.09.2021, which was the last date for receipt of valid applications for settlement, there was no case pending in relation to the assessee as on 31.01.2021, within the meaning of the provisions of Section 245C(1), Section 245A of the I.T. Act read with the Central Board of Direct Taxes [CBDT] Instructions F.No.299/22/2021-Dir (Inv–III)/174 dated 28.09.2021, and hence the applications in question were not maintainable before the Board. It is the legality of the said stand taken by the Interim Board that was called in question in the writ petitions.

3. In as much as a resolution of the dispute in these appeals requires us to notice the statutory provisions that were in vogue during the relevant period, we deem it apposite to extract those provisions hereunder:

The statutory provisions:

Section 245A( b ):

Definitions:

245A. In this Chapter, unless the context otherwise requires,—

(a) xxxxxxxx

(b) “case” means any proceeding for assessment under this Act, of any person in respect of any assessment year or assessment years which may be pending before an Assessing Officer on the date on which an application under sub-section (1) of section 245C is made.

Section 245A( eb ):

(eb) "pending application" means an application which was filed under section 245C and which fulfils the following conditions, namely: —

(i) it was not declared invalid under sub-section (2C) of section

245D; and (ii) no order under sub-section (4) of section 245D was issued on or before the 31^st day of January, 2021 with respect to such application; Section 245AA:

Interim Boards for Settlement.

245AA. (1) The Central Government shall constitute one or more Interim Boards for Settlement, as may be necessary, for the settlement of pending applications.

(2) Every Interim Board shall consist of three members, each being an officer of the rank of Chief Commissioner, as may be nominated by the Board.

(3) If the Members of the Interim Board differ in opinion on any point, the point shall be decided according to the opinion of the majority.

Section 245B(1):

Income-tax Settlement

Commission245B. (1) The Central Government shall constitute a Commission to be called the Income-tax Settlement Commission for the settlement of cases under this Chapter.

Provided that the Income-tax Settlement Commission so constituted shall cease to operate on or after the 1^st day of February, 2021.

Section 245C(1):

Application for settlement of cases 245C.— (1) An assessee may, at any stage of a case relating to him, make an application in such form and in such manner as may be prescribed, and containing a full and true disclosure of his income which has not been disclosed before the Assessing Officer, the manner in which such income has been derived, the additional amount of income-tax payable on such income and such other particulars as may be prescribed, to the Settlemen