2023 (12) TMI 1451 - HC - Income Tax

Applications for settlement filed before the Interim Board for Settlement - grievance of the assessees was essentially on account of the amendments that were brought about to the I.T. Act through the Finance Act 2021 - HELD THAT - The issue is covered by the judgment of the Division Bench of Madras High Court in M/s Jain Metal Rolling Mills v. Union of India 2023 (11) TMI 1111 - MADRAS HIGH COURT In the result these writ petitions are partly allowed and are disposed off on the following terms (i) 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; (ii) 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; (iii) 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; (iv) 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.

Summary

The Kerala High Court, through Justice Dinesh Kumar Singh, adjudicated writ petitions challenging certain orders (Ext. P8, P10, and P39-P45) related to eligibility deadlines under Section 245C(5) of the Income Tax Act, 1961, as amended by the Finance Act, 2021. The Court relied on the Division Bench ruling of the Madras High Court in M/s Jain Metal Rolling Mills v. Union of India [MANU/TN/6417/2023], which "read down" the retrospective deadline from 1st February 2021 to 31st March 2021. Key directions included: (i) extending the last date of eligibility to 31.03.2021; (ii) deeming applications filed between 01.02.2021 and 31.03.2021 as pending for consideration by the Interim Board; and (iii) setting aside rejections based solely on non-pending status as of 31.01.2021. The Kerala High Court accordingly allowed the petitions, set aside the impugned orders, and remitted the cases for fresh decisions consistent with the Madras High Court's authoritative interpretation, emphasizing adherence to the statutory scheme and merit-based consideration.