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2017 (9) TMI 825 - HC - Income TaxApplication for settlement rejected - combined application for settlement of all cases - petitioner failed to pay the full tax and interest before the last date provided under the statute i.e. 31.7.2007 - constitutionality of sections 245D(2A), 245D(2D) and 245HA of the Income Tax Act, 1961 inserted by the Finance Act 2007 as ultra vires Article 14 of the Constitution - Held that:- The combined effect of the statutory provisions prevailing before 1.6.2007 in our opinion did not prohibit filing of separate applications for settlement assessment year wise and the newly introduced requirement of payment of additional tax with interest by 31.7.2007, failing which, the proceedings before the Settlement Commission would abate, would persuade us to hold that it was open for the Settlement Commission to examine the requirement of payment of additional tax with interest as may be correlated to a particular assessment year. It may be that the assessee himself had filed one common application for settlement of all cases. In view of the statutory provisions prevailing before 1.6.2007 and in view of the noted changes after 1.6.2007, such application need not have to be seen as one composite application for settlement which may either in its entirety are allowed to be proceeded with or be declared as abated. One must look at the application in the background of such statutory provisions before and after 1.6.2007. Had the requirement of payment of additional tax with interest been existing in the statute when the petitioner applied for settlement surely, he would have applied only to the extent that he was able to muster up sufficient funds for additional tax and interest. Under the circumstances, the petitioner's request that entire application for settlement may not be declared as abated, would have to be accepted. The petitioner had paid additional tax and interest by 31.7.2007, his proceedings before the Settlement Commission, would not abate. The abatement would apply with respect to those assessment years for which such payment was not made. In the result, the petition is allowed in part. The impugned order of settlement dated 4.10.2007 is set aside to the limited extent. Declaration of abatement of assessment proceedings before the Settlement Commission in terms of subsection( 3) of section 245HA, would be limited to the assessment years 2004-2005 and 2006-2007. The application for rest of the assessment years would be revived and be placed before the Settlement Commission for disposal in accordance with law.
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