The Bombay High Court on Friday ruled that the cut-off date of March 31, 2008, for the Income Tax Settlement Commission to settle cases pertaining to tax evasions “was arbitrary”.
The division bench of Justice F.I. Rebello and Justice J.H. Bhatia allowed the petitions filed by about 500 applicants including – Star News Television Limited – who had moved the court challenging the provision of the Finance Act (2007) which stated that the Commission had to resolve matters pending up to July 1, 2007, by March 31, 2008.
The Income Tax Act mandated the Commission to settle cases speedily when approached by assessees.
Earlier there was no time limit, but the Finance Act (2007), however, imposed a deadline. Once this deadline ended, the pending cases would become redundant and the applicants would have to go back to the assessing officer.
Adversely for the assessees, this would imply that confidential information brought on record for settling the matter would then be available to such an officer, argued Iqbal Chagla, counsel for Star.
However, counsel for the Income Tax Department, Beni Chatterji, contended that the Commission was set up for speedy disposal of matters, which could not be fulfilled. It was thus necessary to fix a time limit in these cases.
The HC has, however, asked the Commission to decide whether any matter delayed by the applicant itself.
If yes, the Commission has been directed to abate the appeal.