Union of India Vs Thomas Joseph (Kerala High Court)
Kerala High Court recently delivered a significant judgment concerning the eligibility criteria and timelines for filing applications before the Interim Board for Settlement under the Income Tax Act, 1961. The ruling, issued in a set of writ appeals including Union of India Vs. Thomas Joseph and Thomas Joseph Vs. Union of India, builds upon a previous High Court decision and incorporates the Supreme Court’s directives on limitation periods during the COVID-19 pandemic.
The case involved two writ appeals challenging a single judge’s judgment dated August 22, 2024. One appeal was filed by the Union of India, and the other by the assessee, Thomas Joseph, both seeking modifications to the earlier order.
Background of the Dispute
The core issue revolved around the conditions for entertaining settlement applications under Chapter XIX-A of the Income Tax Act. Specifically, it questioned the validity of an additional condition imposed by the Central Board of Direct Taxes (CBDT) through an order dated September 28, 2021, which mandated that assessees must satisfy eligibility requirements as of January 31, 2021 (to be read as March 31, 2021), to file a settlement application.
The assessee, Thomas Joseph, had received notices under Section 153A of the Income Tax Act between March 31, 2021, and September 30, 2021. While his applications for settlement were prepared before September 30, 2021, he could only formally file them on March 17, 2022. This delay occurred because he was granted permission to access seized materials and digital devices only on October 4, 2021, which was essential for completing the application process and paying fees. The Interim Board for Settlement subsequently rejected his application, citing the lack of pending proceedings as of January 31, 2021.
