Blossom Gold Collection P.Ltd vs Union Of India
2021 Latest Caselaw 7016 Ker

                    IN THE HIGH COURT OF KERALA AT ERNAKULAM

                                       PRESENT

                      THE HONOURABLE MR.JUSTICE S.V.BHATTI

                                           &

                 THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS

           MONDAY, THE 01ST DAY OF MARCH 2021 / 10TH PHALGUNA, 1942

                                 WA.No.405 OF 2021

   AGAINST THE ORDER/JUDGMENT IN WP(C) 4500/2021(J) OF HIGH COURT OF KERALA


APPELLANT/S:

                 BLOSSOM GOLD COLLECTION P.LTD.
                 16/501M, MONTANA ESTATE, PERINGOLAM, PAINGOTTUPURAM,
                 CALICUT - 673 571 REPRESENTED BY ITS DIRECTOR SRI.RAYAROTH
                 ABDUL JALEEL.

                 BY ADVS.
                 SRI.K.P.ABDUL AZEES
                 SHRI.AKHIL SURESH
                 SMT.T.ARCHANA

RESPONDENT/S:

       1         UNION OF INDIA
                 REPRESENTED BY THE FINANCE SECRETARY, DEPARTMENT OF REVENUE,
                 MINISTRY OF FINANCE, 3RD FLOOR, JEEVAN DEEP BUILDING, SANSAD
                 MARG, NEW DELHI - 110 001.

       2         INCOME TAX SETTLEMENT COMMISSION
                 ADDITIONAL BENCH, CHENNAI REPRESENTED BY ITS SECRETARY,
                 SATGURU COMPLEX, 640, ANNA SALAI, NANDANAM, CHENNAI - 600 035.

       3         ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE II
                 NEW ANNEX BUILDING, MANANCHIRA, KOZHIKODE - 673 001.


OTHER PRESENT:

                 SRI P K R MENON -SR ADV

      THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 01.03.2021, THE COURT ON
THE SAME DAY DELIVERED THE FOLLOWING:
 W.A. No. 405/2021
                                    -2-




                            JUDGMENT

Dated this the 1st day of March 2021

S.V. Bhatti, J.

The writ petitioner is the appellant. The intra-Court

appeal is directed against interim order dated 22.02.2021

refusing to grant interim stay of Exts.P1 and P2 series.

2. Chapter XIX-A of the Income Tax Act deals with

settlement of cases. The Union Finance Bill 2021, with effect

from 01.02.2021 repealed Section 245C of Chapter XIX-A of

Income Tax Act, 1961 (for short 'the Act'). The petitioner

received notices dated 14.01.2020 and 23.11.2020 under Sections

153C and 143(2) of the Act. The petitioner, with effect from

01.02.2021, since is denied the statutory right available to an

assessee to move for settlement of cases under Chapter XIX-A

and also that the Settlement Commissioner from 01.02.2021 was W.A. No. 405/2021

not receiving the applications from the assessee, has filed the

instant writ petition for appropriate directions, including

direction to receive the application of petitioner under Section

245C of the Act. The petitioner refers to and relies on the

interim order of the High Court for the State of Telangana in

Writ Petition No.3181 of 2021, the Interim Order of Madras High

Court in W.P.(C) No.3001 of 2021 and W.M.P. No.3365 of 2021 in

support of petitioner's case for grant of interim stay of Exts.P1

and P2 notices, stated supra. The learned Single Judge, through

order under appeal, directed the 2nd respondent to receive

application of petitioner for settlement filed under Section 245C

of the Act, however, declined to grant stay of Exts. P1 and P2

series. Hence the appeal.

3. Senior Counsel Sri.Aravind P Datar appearing for the

appellant argues that the interim orders granted by the High

Court for the State of Telangana and High Court of Madras W.A. No. 405/2021

protected the interest of assessee and the respective assessing

officers in those cases are either precluded from finalising the

assessment or that the consequence upon acceptance of

application for settlement is preserved to the assessee. In the

case on hand, the rejection of prayer for interim stay and

simultaneously issuing direction to receive the application of

petitioner for settlement would result in hardship and become

self-contradictory. He explains by arguing that the assessing

officer if completes the assessment on or before 31.03.2021,

then the petitioner is denied of the remedies available for

settlement of case under Chapter XIX-A of Income Tax Act. On

the contrary, the assessing officer is precluded from finalizing

the assessment, Section 153B Explanation (i) protects the

interest of Revenue and subject to the outcome of writ petition

the consideration of application filed for settlement could be

proceeded with by the Assessing Officer. Therefore, it is argued W.A. No. 405/2021

that the petitioner satisfies the prima facie case. Hence,

direction for accepting application for settlement of issue and

as continuation thereto, appropriate stay or status quo orders on

Exts.P1 and P2 could have been made by the learned Single

Judge. He prays for allowing the appeal.

4. Learned Senior Advocate P.K.R. Menon appearing for

respondent argues that the direction is issued to accept the

application of petitioner for settlement under Chapter XIX-A. It

presupposes that the acceptance and consideration thereon is

in accordance with law and further orders that may be made in

this behalf by the Commissioner for Settlement from time to

time. The Court considers granting stay of Exts.P1 and P2, then

the Settlement Commissioner even if desires to summon the

files, notices referred to above from the Office of Assessment

Officer for comprehensively dealing with the application made

by the petitioner would be precluded. He refers to and relies on W.A. No. 405/2021

the judgment of the Supreme Court reported in Commissioner of

Income Tax v. Express Newspapers Ltd 1, in support of his argument

that once the application made under Section 245C is admitted

for consideration (after giving notice to and considering the

report of the Commissioner of Income-tax as provided by

Section 245D) the Commission shall have to withdraw the case

relating to that assessment year (or years, as the case may be)

from the assessing/appellate/revising authority and deal with

the case, as a whole, by itself (emphasis added). Therefore, it is

argued that there is no need to order stay of all further

proceedings pursuant to Exts.P1 and P2.

5. We have heard the learned Senior Counsel appearing

for the parties and perused the record.

6. In the case on hand, the learned Single Judge while

prima facie accepting the case of petitioner directed acceptance

of the application of petitioner under Section 245C of the Act. 1 1994 SC 443 W.A. No. 405/2021

The appeal raises limited grievance of petitioner against not

granting interim stay of Exts.P1 and P2. The scheme provided

for under Chapter XIX-A envisages different steps and this

Court bears in perspective Section 245A(b) defining what 'case'

means. The argument of learned Senior Counsel is that in the

event the assessment order is made on Exts.P1 and P2 notices,

the petitioner would be dis-entitled from working out the right

accepted by Chapter XIX-A of the Act. As rightly argued by

Senior Advocate Aravind P Datar the consideration of stay vis-a-

vis Exts.P1 and P2 by this Court would not also cause prejudice

or hardship to the Department, in view of Section 153B

explanation (i). At this junction Exts.P1 and P2 result in

assessment orders, then the claim or right of petitioner is

adversely affected. The Department, as on date, has not

challenged the order of learned Single Judge directing receipt of

application of petitioner under Section 245C of the Act. W.A. No. 405/2021

Further we also appreciate the objections raised by Advocate

P.K.R. Menon appearing for the Department that the application

of petitioner is taken on file, and in such an event the

Settlement Commissioner has to withdraw the case relating to

the subject Assessment Year from the assessing officer, but the

stay on Exts.P1 and P2 would preclude the Commissioner from

summoning the file and this is an avoidable situation as well in

the total circumstances of the case. Keeping the above in

perspective, we are satisfied that the order under appeal could

be modified and is accordingly modified as follows:

(a) There shall be an interim stay of Exts.P1 and P2 series

during the pendency of the writ petition, subject to the

following:

(b) The interim order granted by this Court shall not be

understood as, in any manner, restricting the discretion

available to the authorities under Chapter XIX-A of the Income W.A. No. 405/2021

Tax Act, either to admit or process the application of petitioner

for settlement, and/or withdraw and summon the subject

assessment files to the Office of the Settlement Commissioner

from the Office of the Assessing Officer.

(c) Interim order and corollary thereof are subject to the

final outcome of the writ petition.

The writ appeal is allowed as indicted above.

Sd/-

S.V.BHATTI

JUDGE

Sd/-

BECHU KURIAN THOMAS

JUDGE

jjj