Blossom Gold Collection P. Ltd. v Union of India

## 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-** ## **J U D G M E N T** 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 The Union Finance Bill 2021, with effect from 01.02.2021 repealed Section 245C of Chapter XIX-A of Income Tax Act, 1961 (for short 'the Act').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** **-3-** 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 2[nd] 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** **-4-** 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** **-5-** 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** **-6-** 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** **-7-** 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-avis_ 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** **-8-** 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** **-9-** 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