Pradeep Kumar Naredi Vs Union of India & Ors. (Calcutta High Court)
Calcutta High Court held that provisions of sub-section (5) section 245C of Income Tax Act is effective only from 1st February 2021, hence, application before Settlement Commission prior to that date cannot be held as invalid. Accordingly, application before Settlement Commission restored.
Facts- The appellants have prayed for a declaration that the amendment introduced by the Finance Act, 2021 by which the Income Tax Settlement Commission was abolished and an interim Board was constituted to deal with the pending applications to be ultra vires, arbitrary, unconstitutional and violative of the provisions of the Act and Article 14 of the Constitution of India. The petitioners have also prayed for issuance of a writ in the nature of certiorari quashing the CBDT order dated 28.09.2021 being ultra vires, arbitrary, unconstitutional and violative of the provisions of the Act and Article 14 of the Constitution of India and for quashing the order of the Settlement Commission dated 14.01.2022.
Conclusion- Hon’ble Division Bench of Bombay High Court in the case of Sar Senapati Santaji Ghorpade Sugar Factory Ltd. vs. Assistant Commissioner of Income-tax held that retrospective legislation cannot affect the vested rights. It was further observed that the purport of subsection 5 of Section 245(C) is not to make an application already filed after 01.02.2021 as invalid but it should be read as no application shall be made after 01.02.2021 once the assent of the Hon’ble President of India has been received. Any application made by the assessee before the grant of assent will not be hit by Subsection 5 of Section 245(C) of the Act.
