Case Law Details
CIT Vs Income Tax Settlement Commission And Sarmila Ghosh (Calcutta High Court)
In a notable case involving the Commissioner of Income Tax (CIT) and the Income Tax Settlement Commission, the Calcutta High Court dismissed an income tax appeal challenging a final order issued by the Settlement Commission after a significant nine-year delay. This article delves into the details of the case, the arguments put forth, and the court’s decision.
Detailed Analysis:
1. Background of the Case: The case revolves around an appeal directed against an order dated September 2, 2014, pertaining to WP 496 of 2014. In this case, a writ petition was filed by the department to challenge an order of the Settlement Commission dated August 14, 2013. The Settlement Commission, through its order, entertained a request for the initiation of proceedings for the assessment years 2011-12, 2012-13, and 2013-14.
2. Limited Challenge: The writ petitioner/appellant contested the Settlement Commission’s order dated August 14, 2013, specifically concerning the assessment years 2012-13 and 2013-14.
3. Appellant’s Argument: The appellant’s counsel argued that the assessee had not filed a return for the assessment years 2012-13 and 2013-14. Consequently, they argued that the provisions of Section 139(1) of the Income Tax Act, 1961, did not apply to the assessee. Furthermore, no notice under Section 142(1) had been issued to the assessee for those assessment years. This led to the conclusion that there was no scope for assessing the assessee for those two relevant assessment years under Section 143. Therefore, Section 153 of the Act of 1961, which deals with the time limit for assessment, was not applicable. Given that there were no pending assessments or proceedings, the explanation to (iv) to clause (b) of Section 245A was not triggered. Consequently, as no assessment proceeding was pending, Section 245C was also not applicable. The Settlement Commission, according to the appellant’s argument, did not have the jurisdiction to consider those assessment years.
4. Reference to Precedent: The learned Single Judge referred to a decision made by another learned Single Judge in WP 341 of 2011. In that judgment, it was held that if the time period for making an assessment had not expired on the date the settlement commission was formed, the commission could entertain and proceed with it, regardless of whether the income tax return had been filed or not.
5. Settlement Commission’s Final Order: During the appeal’s pendency, the Settlement Commission issued a final order of settlement for the two assessment years. The assessee accepted this final order and paid the tax accordingly. Importantly, the department did not contest the final order of settlement. This final order was dated December 19, 2014.
6. Nine-Year Delay: A significant period of nine years passed since the final order was issued by the Settlement Commission, and neither party contested it.
7. Court’s Decision: Given the extended delay and the acceptance of the final order by the parties involved, the Calcutta High Court decided not to interfere with the appeal. The points of law raised were kept open.
Conclusion: The case of CIT vs. Income Tax Settlement Commission and Sarmila Ghosh saw the Calcutta High Court dismiss an income tax appeal after a remarkable nine-year delay. This decision highlights the importance of timely legal actions in tax matters and underscores the significance of accepting final orders issued by tax authorities, especially when no timely objections or challenges are raised.
FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT
The appeal is directed against the order dated September 2, 2014 passed in WP 496 of 2014. By the impugned order, learned Single Judge referred to a decision of a coordinate Bench of the learned Single Judge in another matter and dismissed the writ petition in view of the position of law laid down by the Single Judge in the other matter.
In the facts of the present case, a writ petition was filed at the behest of the department challenging the order of the Settlement Commission dated August 14, 2013. By the order dated August 14, 2013, the Settlement Commission entertained a request for initiation of Settlement Commission for the assessment years 2011-12, 2012-13 and 2013-14.
The writ petitioner/appellant challenged the order dated August 14, 2013 of the Settlement Commission limited to the years 2012-13 and 2013-14.
Learned advocate appearing for the appellant submits that, the assessee did not file return for the assessment year 2012-13 and 2013-14. Therefore, the assessee does not come within the purview of Section 139(1) of the Income Tax Act, 1961. No notice under Section 142(1) was issued to the assessee for such assessment year. Therefore, there is no scope of assessment of the assessee for the two relevant assessment years as contemplated under Section 143. Consequently, Section 153 of the Act of 1961 was not attracted since there can be no time limit for assessment as the provision for assessment was not applicable. Since no assessment or proceeding for assessment was pending, explanation to (iv) to clause (b) of Section 245A was not attracted. Consequently, since no proceeding for assessment was pending, Section 245C was not attracted. Therefore, the Settlement Commission could not assume jurisdiction in respect of those assessment years.
Learned Single Judge referred to a decision of another learned Single Judge dated August 1, 2011 rendered in WP 341 of 2011. Learned Judge held that His Lordship was bound by the decision of the coordinate Bench.
In WP 341 of 2011, it was held that if the time period to make an assessment did not expire on the date on which the settlement commission was made, the commission may entertain and proceed with the same irrespective of whether the income tax return was filed or not.
We are informed, that during the pendency of the appeal, the Settlement Commission passed final order of settlement in respect of the two assessment years. The assessee accepted the final order passed by the Settlement Commission and paid tax in accordance therewith. The department did not assail the final order of settlement. The final order of settlement is dated December 19, 2014.
A period of nine years elapsed since the final order was passed by the Settlement Commission without the same being assailed by the parties thereto.
In such circumstances, we are not minded to interfere with the appeal. Points of law raised are kept open.
APO 142 of 2018 is disposed of without any order as to costs.
