PCIT-1 Vs MD Industries Pvt. Ltd. (Gujarat High Court)
The Gujarat High Court dismissed petitions filed under Article 227 of the Constitution challenging a common order of the Income Tax Appellate Tribunal dated 01.02.2021. The Tribunal had rejected Miscellaneous Applications seeking recall of its earlier order dated 06.12.2019, by which it had condoned a delay of 4379 days and remitted income tax appeals back to the Commissioner (Appeals) for fresh adjudication on merits for Assessment Years 1999–2000 to 2005–06.
Read SC Judgment in above case: SC Upholds Income Tax Appeal Restoration Despite Pending Settlement Proceedings
The case arose from a survey conducted under Section 133A of the Income Tax Act on 11.03.2005 at the premises of a chartered accountant and a group entity, during which creation of bogus capital build-up cases and transfer of funds to group assessees was admitted. The assessee filed applications before the Settlement Commission on 09.03.2006. While the settlement applications were pending, assessment orders under Section 143(3) were passed on 28.12.2006. Appeals filed before the Commissioner (Appeals) were dismissed without examining merits due to pendency of settlement proceedings, relying on Section 245F(2) of the Act.
The Settlement Commission initially admitted the applications but later disposed of them as abated following statutory amendments. That order was challenged before the Bombay High Court, which remanded certain matters for reconsideration. Subsequent proceedings before the Settlement Commission continued, including submission of reports and objections. During this period, the assessee filed appeals before the Tribunal against the Commissioner (Appeals)’s dismissal orders, along with applications seeking condonation of delay. The Tribunal condoned the delay and remanded the matters to the Commissioner (Appeals) for decision on merits.
