2024 (3) TMI 1454 - HC - Income Tax

Writ of Declaration declaring the amendment made to Section 245A of the Income Tax Act by inserting sub clause (da) (ea) and (eb) 245B 245BC 245BD proviso to 245C 245D 245DD 245F 245G 245H and insertion of new Section 245AA and 245M by the Finance Act 2021 as arbitrary illegal and void . HELD THAT - In similar matters in the case of M/s. Jain Metal Rolling Mills Rep.by its Chief Financial Officer vs. Union of India Rep. by its Secretary Ministry of Finance and Others 2023 (11) TMI 1111 - MADRAS HIGH COURT Section 245C(5) of the Income Tax Act 1961 (as amended by the Finance Act 2021) is read down by removing the retrospective last date of 1st date of February 2021 as 31st day of March 2021. Consequently the last date of eligibility mentioned paragraph 4(i) of the impugned circular dated 28.09.2021 shall also be read as 31.03.2021. All the applications in respect of the petitioners even in respect of the cases arising between 01.02.2021 to 31.03.2021 shall be deemed be pending applications and shall be deemed to be pending applications for the purposes of consideration by the Interim Board. Wherever they are rejected on the ground that they did not have a case pending as on 31.01.2021 such orders shall stand set aside and the applications shall be deemed to be pending applications for the consideration by the Interim Board if otherwise in order and eligible and shall be dealt with in accordance with law on merits in accordance with the scheme that may be framed by the Central Government as in respect of the other cases which arose prior to 31.01.2021. The Settlement Commissioner shall in tune with the order passed by us and referred to above pass orders.

Summary

The Madras High Court, through the Hon'ble Chief Justice Sanjay V. Gangapurwala and Justice D. Bharatha Chakravarthy, addressed writ petitions challenging amendments made by the Finance Act, 2021 to various provisions of the Income Tax Act, including Sections 245A, 245B, 245BC, 245BD, 245C, 245D, 245DD, 245F, 245G, 245H, and the insertion of new Sections 245AA and 245M. The petitioners sought declarations that these amendments were "arbitrary, illegal and void," and also sought to quash an order dated 24.11.2023.Relying on precedent from *M/s. Jain Metal Rolling Mills v. Union of India* (W.P.Nos.13455 of 2021, dated 17.11.2023), the Court read down Section 245C(5) by removing the retrospective deadline of 1 February 2021 and extending it to 31 March 2021. The Court held that applications pending between 1 February and 31 March 2021 shall be deemed pending for consideration by the Interim Board. Any rejections based solely on the absence of a pending case as of 31 January 2021 were set aside, and such applications must be reconsidered on their merits.Accordingly, the Settlement Commissioner was directed to pass orders consistent with this ruling. The impugned orders were set aside, the writ petitions disposed of, and no costs were awarded. Related miscellaneous petitions were closed.