Babubhai Ramchanddas Patel v. Income Tax Settlement Commission & 2

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION NO. 14826 of 2012 With SPECIAL CIVIL APPLICATION NO. 14827 of 2012TO SPECIAL CIVIL APPLICATION NO. 14828 of 2012 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER ================================================================ 1 Whether Reporters of Local Papers may be allowed to see the judgment ?the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ?judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder ?to the interpretation of the Constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ================================================================ BABUBHAI RAMCHANDDAS PATEL....Petitioner(s) Versus INCOME TAX SETTLEMENT COMMISSION & 2....Respondent(s) ================================================================ Appearance: MR TEJ SHAH, ADVOCATE for the Petitioner(s) No. 1MR SUDHIR M MEHTA, ADVOCATE for the Respondent(s) No. 2 C/SCA/14826/2012 JUDGMENT ================================================================ CORAM: HONOURABLE MR.JUSTICE KS JHAVERIandHONOURABLE MR.JUSTICE K.J.THAKER Date : 12/11/2014 ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1.All these matters involve common questions on law and facts and hence, they are decided by this common judgment. 2.These petitions have been filed against the order passed by the Income Tax Settlement Commission whereby, the Commission declined to proceed with the settlement applications filed by the petitioner as per the provision of Section 245D(2D) of the Income Tax Act. 3.Briefly stated, the facts are that the petitioner filed a Settlement Application for the Block period of A.Y. 1990-91 to A.Y. 1999-00 and for the further period of 01.04.1999 to 12.08.1999 pertaining to A.Y. 2000-01 before respondent no.1 The respondent no.1 admitted the Settlement Application vide order dated 10.10.2002. 4.Respondent no.1 informed the petitioner that the interest to the tune of Rs.87,020/- has not been paid. The petitioner paid the said sum on 25.07.2012 before the Settlement Commissioner. On 26.07.2012 the hearing was conducted. Thereafter, on 30.07.2012, respondent no.1 passed the order holding that the application for settlement cannot be proceeded with as per Section 245D(2D) of the Act. Being aggrieved by the said order, the present petitions have been preferred. 5.We have heard learned counsel for both the sides. The Settlement Commission has passed the impugned order by placing reliance upon a decision of the Apex Court in the case of CIT v. Suresh Gupta, 297 ITR 322. 6.However, subsequently, the said decision of the Apex Court has been dis-approved by the Larger Bench of the Apex Court in the case of Commissioner of Income-tax (Central)-1, New Delhi v. Vatika Township (P) Ltd., [2014] 49 taxmann.com 249 (SC) wherein, in para-38, it has been observed as under; “38. When we examine the insertion of proviso in Section 113 of the Act, keeping in view the aforesaid principles, our irresistible conclusion is that the intention of the legislature was to make it prospective in nature. This proviso cannot be treated as declaratory / statutory or curative in nature...” 7.In view of the above, the view adopted by the Settlement Commissioner is erroneous and deserves to be quashed and set aside. Accordingly, the impugned order passed by the Settlement Commissioner is quashed and set aside and the matter is remitted to the Settlement Commissioner for adjudication afresh in light of the aforesaid decision of the Apex Court. Needless to say that “38. When we examine the insertion of proviso in Section 113 of the Act, keeping in view the aforesaid principles, our irresistible conclusion is that the intention of the legislature was to make it prospective in nature. This proviso cannot be treated as declaratory / statutory or curative in nature...” 7.In view of the above, the view adopted by the Settlement Commissioner is erroneous and deserves to be quashed and set aside. Accordingly, the impugned order passed by the Settlement Commissioner is quashed and set aside and the matter is remitted to the Settlement Commissioner for adjudication afresh in light of the aforesaid decision of the Apex Court. Needless to say that adjudication shall be done after giving due opportunity of hearing to both the sides. 8.With the above observations, the petitions stand partly allowed. Rule is made absolute to the above extent with no order as to costs. (K.S.JHAVERI, J.) (K.J.THAKER, J) Pravin/*