M/S. Foster Wheeler (G.b.) Ltd.,6Th Floor Zenith Building,Ascendas It Park, Csir Road,Taramani, Chennai -600 113, Tamil Nadu. … v. Income Tax Settlement Commission,Additional Bench, Chennai Ministry Of Finance Department Of Revenue,640 Anna Salai, Nandanam, Chennai - 600 035

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 05.01.2021 CORAM THE HONOURABLE DR. JUSTICE ANITA SUMANTH Writ Petition No.1221 of 2020 M/s. Foster Wheeler (G.B.) Ltd.,6th Floor Zenith Building,Ascendas IT park, CSIR Road,Taramani, Chennai -600 113, Tamil Nadu. … Petitioner Vs 1 Income Tax Settlement Commission,Additional Bench, Chennai Ministry of Finance Department of Revenue,640 Anna Salai, Nandanam, Chennai - 600 035. 2 Commissioner of Income Tax (International Taxation),Chennai 4th Floor BSNL Building, Tower-I,Greams Road, Chennai -600 006. 3 Deputy Commissioner of Income Tax,International Taxation-1(1),4th Floor, BSNL Building Tower-I,Greams Road, Chennai -600 006. … Respondents PRAYER: Petition filed under Article 226 of the Constitution ofIndia praying for the issuance of Writ of CertiorarifiedMandamus, calling for the records of the 1st Respondent inTN/CN-INTL.TAX/ 2019-20/14/IT passing the Impugned order dated11.07.2019 under section 245D(2C) of the Act and to quash thesame as arbitrary unjust and illegal and to consequently directthe 1st Respondent to pass a fresh order under Section 245D(2C)of the Act admitting the application filed by the Petitioner andproceed to settle the case in accordance with law. For Petitioner : Mr.N.V.BalajiFor Respondents : Mrs.Hema Muralikrishnana, Senior Standing Counsel The petitioner challenges an order of the SettlementCommission (SC)/Commissioner dated 15.05.2019 passed underSection 245D(2C) of the Income Tax Act, 1961 (in short Act)wherein the SC did not permit the petitioner to proceed with theapplication filed treating the same as invalid and rejecting thesame in limine. 2. The brief facts are that the petitioner, incorporatedunder the laws of the United Kingdom, is a consultant engineerforcutting-edgeprocessingfacilitiesandrelatedinfrastructure for various industries. It had entered intocontracts with Foster Wheeler Energy Limited (FWEL) during theperiod 2006 to 2019 for rendering Engineering, ProjectManagement Consultant Services (PMC) and Engineering Procurementand Construction management Consultant Services (EPCm). As perthe terms inter se the parties, sub-contracting of the contractsto third parties was permitted. 3. Surveys were conducted under Section 133A of the Act andmaterials found in the course thereof led to the re-opening ofassessments for assessment years (AY) 2011-12, 2014-15 and 2015-16 under Section 147 of the Act. The petitioner filed asettlement application under Section 245 C of the Act and anorder of admission passed under Section 245D(1) on 23.05.2019.After exchange of reports by the Commissioner of Income Tax andreply by the petitioner, the matter was posted for hearing interms of Section 245D(2C). 4. The Commissioner in the impugned order has gone intothe question of whether there has been a full and truedisclosure of income by the petitioner. In doing so, theCommissioner has dealt in detail with the nature ofdocumentation entered into by the parties and the bifurcation ofthe scope of work. This, in fact, touches upon the issuesraised in the settlement application. In my view the cart hasbeen put before the horse by the Commissioner in dealing withthese issues even at the stage of 245D(2C). 5. I have had occasion to consider the same issue in thecase of Hitachi Power Europe GmbH V. Income Tax SettlementCommission and others (order dated 17.02.2020 in W.P.No.3706 of2020) and in very similar circumstances, have held that adiscussion on the merits of the taxability of income at thestage 245D(2C) would be beyond the scope of what that provisionenvisaged. The decision has been confirmed by the Division Benchon 04.09.2020 in W.A.No.581 of 2020. No serious contest is laidto this position by the revenue. https://hcservices.ecourts.gov.in/hcservices/ 5. I have had occasion to consider the same issue in thecase of Hitachi Power Europe GmbH V. Income Tax SettlementCommission and others (order dated 17.02.2020 in W.P.No.3706 of2020) and in very similar circumstances, have held that adiscussion on the merits of the taxability of income at thestage 245D(2C) would be beyond the scope of what that provisionenvisaged. The decision has been confirmed by the Division Benchon 04.09.2020 in W.A.No.581 of 2020. No serious contest is laidto this position by the revenue. https://hcservices.ecourts.gov.in/hcservices/ 6. However, revenue points out that the petitioner has beenlethargic in approaching this Court and there are laches on itspart insofar as the writ petition is filed only after six monthsfrom the date of the impugned order and that too after thepetitioner has participated in the proceedings for assessmentinitiated by the Assessing Authority. The petitioner explainsthe interregnum as administrative delay since some of theapprovals necessary for the initiation of litigation had to bereceived from abroad. I accept this submission and reject theargument of the Revenue. 7. In view of the discussion as aforesaid, I am of the viewthat the writ petition is liable to be allowed and I do so. Theimpugned order is set aside. The petitioner may be heard by theSettlement Commission on merits on a date to be fixed afterissuing notice and a final order passed as expeditiously aspossible. Connected miscellaneous petitions are closed. Nocosts. Sd/- Assistant Registrar(CS VI) //True Copy// Sub Assistant RegistrarSka/sTo 1 The Income Tax Settlement Commission, Additional Bench, Chennai Ministry of Finance Department of Revenue, 640 Anna Salai, Nandanam, Chennai - 600 035. 2 The Commissioner of Income Tax (International Taxation), Chennai 4th Floor BSNL Building, Tower-I, Greams Road, Chennai -600 006. 3 The Deputy Commissioner of Income Tax, International Taxation-1(1), 4th Floor, BSNL Building Tower-I, Greams Road, Chennai -600 006. +1cc to Mr.N.V.Balaji, Advocate Sr.440+1cc to M/s.Hemamuralikrishnan, Advocate Sr.333 Writ Petition No.1221 of 2020and WMP. Nos.8282, 1482 & 1483 of 2020 sra[co]srg 22/02/2021