Kerala High Court
Union Of India vs M/S.Holy Spirit Ministries on 20 June, 2025
Author: A.K.Jayasankaran Nambiar
Bench: A.K.Jayasankaran Nambiar
2025:KER:43582
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR
&
THE HONOURABLE MR. JUSTICE P.M.MANOJ
FRIDAY, THE 20TH DAY OF JUNE 2025/30TH JYAISHTA, 1947
W.A.NO.2042 OF 2024
AGAINST THE JUDGMENT DATED 22.08.2024 IN W.P(C).NO.44205
OF 2023 OF HIGH COURT OF KERALA
APPELLANT(S)/RESPONDENTS:
1 UNION OF INDIA,
REPRESENTED BY THE FINANCE SECRETARY, DEPARTMENT
OF REVENUE MINISTRY OF FINANCE, 3RD FLOOR, JEEVAN
DEEP BUILDING, SANSAD MARG, NEW DELHI, PIN - 110001
2 INTERIM BOARD FOR SETTLEMENT -II,
REPRESENTED BY ITS SECRETARY, 9TH FLOOR, LOK NAYAK
BHAVAN, KHAN MARKET, NEW DELHI, PIN - 110003
3 THE CENTRAL BOARD OF DIRECT TAXES,
REPRESENTED BY ITS CHAIRPERSON, DEPARTMENT OF
REVENUE - MINISTRY OF FINANCE, GOVERNMENT OF INDIA,
NEW DELHI, PIN - 110001
4 DEPUTY COMMISSIONER OF INCOME TAX,
CENTRAL CIRCLE - 2, M.G.ROAD, KOCHI, PIN - 682011
BY SRI.JOSE JOSEPH, SR. STANDING COUNSEL, INCOME TAX
DEPARTMENT, KERALA
BY SMT.SUSIE B VARGHESE, STANDING COUNSEL
BY SRI.NAVANEETH.N.NATH, CENTRAL GOVERNMENT COUNSEL
RESPONDENT(S)/PETITIONER:
M/S. AAYANA CHARITABLE TRUST,
REPRESENTED BY ITS MANAGING TRUSTEE MR.SINY
PUNNOOSE, I, MANJADI, THIRUVALLA, PIN - 689101
W.A.Nos.2042 & 2106/24,
161, 162, 180, 183, 184 :: 2 ::
& 408/25
2025:KER:43582
BY ADV.SRI.R.SIVARAMAN
BY ADV.SMT.VANDANA VYAS
BY ADV SRI.N.KRISHNA PRASAD
THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON
16.06.2025, ALONG WITH W.A.NO.2106 OF 2024 AND CONNECTED
CASES, THE COURT ON 20.06.2025 DELIVERED THE FOLLOWING:
W.A.Nos.2042 & 2106/24,
161, 162, 180, 183, 184 :: 3 ::
& 408/25
2025:KER:43582
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR
&
THE HONOURABLE MR. JUSTICE P.M.MANOJ
FRIDAY, THE 20TH DAY OF JUNE 2025/30TH JYAISHTA, 1947
W.A.NO.2106 OF 2024
AGAINST THE JUDGMENT DATED 22.08.2024 IN W.P(C).NO.44251
OF 2023 OF HIGH COURT OF KERALA
APPELLANT(S)/RESPONDENTS:
1 UNION OF INDIA,
REPRESENTED BY THE FINANCE SECRETARY, DEPARTMENT OF
REVENUE, MINISTRY OF FINANCE, 3RD FLOOR, JEEVAN DEEP
BUILDING, SANSAD MARG, NEW DELHI, PIN - 110001
2 INTERIM BOARD FOR SETTLEMENT-II,
REPRESENTED BY ITS SECRETARY, 9TH FLOOR, LOK NAYAK
BHAVAN, KHAN MARKET, NEW DELHI, PIN - 110001
3 THE CENTRAL BOARD OF DIRECT TAXES,
REPRESENTED BY ITS CHAIRPERSON, DEPARTMENT OF
REVENUE - MINISTRY OF FINANCE, GOVERNMENT OF INDIA,
NEW DELHI, PIN - 110001
4 DEPUTY COMMISSIONER OF INCOME TAX,
CENTRAL CIRCLE - 2, M.G. ROAD, KOCHI, PIN - 682011
BY SRI.JOSE JOSEPH, SR. STANDING COUNSEL, INCOME TAX
DEPARTMENT, KERALA
BY SMT.SUSIE B VARGHESE, STANDING COUNSEL
BY SRI.NAVANEETH.N.NATH, CENTRAL GOVERNMENT COUNSEL
RESPONDENT(S)/PETITIONER:
M/S.NEW LIFELINE CHARITABLE MINISTRIES,
REPRESENTED BY ITS MANAGING TRUSTEE MR.MARTIN K E,
H.NO.10991/1, SECTOR 29D, CHANDIGARH, PIN - 160062
W.A.Nos.2042 & 2106/24,
161, 162, 180, 183, 184 :: 4 ::
& 408/25
2025:KER:43582
BY ADV.SRI.R.SIVARAMAN
BY ADV.SMT.VANDANA VYAS
BY ADV SRI.N.KRISHNA PRASAD
THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON
16.06.2025 ALONG WITH W.A.NO.2042 OF 2024 AND CONNECTED
CASES, THE COURT ON 20.06.2025 DELIVERED THE FOLLOWING:
W.A.Nos.2042 & 2106/24,
161, 162, 180, 183, 184 :: 5 ::
& 408/25
2025:KER:43582
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR
&
THE HONOURABLE MR. JUSTICE P.M.MANOJ
FRIDAY, THE 20TH DAY OF JUNE 2025/30TH JYAISHTA, 1947
W.A.NO.161 OF 2025
AGAINST THE JUDGMENT DATED 22.08.2024 IN W.P(C).NO.44252
OF 2023 OF HIGH COURT OF KERALA
APPELLANT(S)/RESPONDENTS 1-4:
1 UNION OF INDIA,
REPRESENTED BY THE FINANCE SECRETARY, DEPARTMENT
OF REVENUE - MINISTRY OF FINANCE, 3RD FLOOR, JEEVAN
DEEP BUILDING, SANSAD MARG, NEW DELHI, PIN - 110001
2 INTERIM BOARD FOR SETTLEMENT - II,
REPRESENTED BY ITS SECRETARY, 9TH FLOOR, LOK NAYAK
BHAVAN, KHAN MARKET, NEW DELHI, PIN - 110003
3 THE CENTRAL BOARD OF DIRECT TAXES,
REPRESENTED BY ITS CHAIRPERSON, DEPARTMENT OF
REVENUE - MINISTRY OF FINANCE, GOVERNMENT OF INDIA,
NEW DELHI, PIN - 110001
4 DEPUTY COMMISSIONER OF INCOME TAX,
CENTRAL CIRCLE - 2, M.G.ROAD, KOCHI, PIN - 682011
BY SRI.JOSE JOSEPH, SR. STANDING COUNSEL, INCOME TAX
DEPARTMENT, KERALA
BY SMT.SUSIE B VARGHESE, STANDING COUNSEL
BY SRI.NAVANEETH.N.NATH, CENTRAL GOVERNMENT COUNSEL
RESPONDENT(S)/PETITIONER:
M/S.NEW HOPE FOUNDATION,
REPRESENTED BY ITS MANAGING TRUSTEE MR.JOHN AUXON,
PUTHUTHOTTAM, KEELPADAPPAI, KANCHIPURAM, CHENNAI,
PIN - 601301
W.A.Nos.2042 & 2106/24,
161, 162, 180, 183, 184 :: 6 ::
& 408/25
2025:KER:43582
BY ADV.SRI.JEHANGIR D. MISTRI (SR.)
BY ADV.SRI.ANIL D. NAIR (SR.)
BY ADV.SRI.R.SIVARAMAN
BY ADV.SMT.VANDANA VYAS
BY ADV.SRI.N.KRISHNA PRASAD
THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON
16.06.2025 ALONG WITH W.A.NO.2042 OF 2024 AND CONNECTED
CASES, THE COURT ON 20.06.2025 DELIVERED THE FOLLOWING:
W.A.Nos.2042 & 2106/24,
161, 162, 180, 183, 184 :: 7 ::
& 408/25
2025:KER:43582
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR
&
THE HONOURABLE MR. JUSTICE P.M.MANOJ
FRIDAY, THE 20TH DAY OF JUNE 2025/30TH JYAISHTA, 1947
W.A.NO.162 OF 2025
AGAINST THE JUDGMENT DATED 22.08.2024 IN W.P(C).NO.44285
OF 2023 OF HIGH COURT OF KERALA
APPELLANT(S)/RESPONDENTS:
1 UNION OF INDIA,
REPRESENTED BY THE FINANCE SECRETARY, DEPARTMENT OF
REVENUE - MINISTRY OF FINANCE, 3RD FLOOR, JEEVAN DEEP
BUILDING, SANSAD MARG, NEW DELHI, PIN - 110001
2 INTERIM BOARD FOR SETTLEMENT -II,
REPRESENTED BY ITS SECRETARY, 9TH FLOOR, LOK NAYAK
BHAVAN, KHAN MARKET, NEW DELHI, PIN - 110003
3 THE CENTRAL BOARD OF DIRECT TAXES,
REPRESENTED BY ITS CHAIRPERSON, DEPARTMENT OF
REVENUE - MINISTRY OF FINANCE, GOVERNMENT OF INDIA,
NEW DELHI, PIN - 110001
4 DEPUTY COMMISSIONER OF INCOME TAX,
CENTRAL CIRCLE - 2, M.G. ROAD, KOCHI, PIN - 682011
BY SRI.JOSE JOSEPH, SR. STANDING COUNSEL, INCOME TAX
DEPARTMENT, KERALA
BY SMT.SUSIE B VARGHESE, STANDING COUNSEL
BY SRI.NAVANEETH.N.NATH, CENTRAL GOVERNMENT COUNSEL
RESPONDENT(S)/PETITIONER:
M/S.HOLY SPIRIT MINISTRIES,
REPRESENTED BY ITS MANAGING TRUSTEE MR.RAJU N.,
RR NO.7, WEEH 2779, OPP TO DIYA ACDEMIC SCHOOL,
KODIGEHALLI MAIN ROAD, AYYAPPAN NAGAR,
K.R.PURAM POST, BENGALURU, PIN - 560036
W.A.Nos.2042 & 2106/24,
161, 162, 180, 183, 184 :: 8 ::
& 408/25
2025:KER:43582
BY ADV.SRI.R.SIVARAMAN
BY ADV.SMT.VANDANA VYAS
BY ADV SRI.N.KRISHNA PRASAD
THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON
16.06.2025 ALONG WITH W.A.NO.2042 OF 2024 AND CONNECTED
CASES, THE COURT ON 20.06.2025 DELIVERED THE FOLLOWING:
W.A.Nos.2042 & 2106/24,
161, 162, 180, 183, 184 :: 9 ::
& 408/25
2025:KER:43582
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR
&
THE HONOURABLE MR. JUSTICE P.M.MANOJ
FRIDAY, THE 20TH DAY OF JUNE 2025/30TH JYAISHTA, 1947
W.A.NO.180 OF 2025
AGAINST THE JUDGMENT DATED 22.08.2024 IN W.P(C).NO.44253
OF 2023 OF HIGH COURT OF KERALA
APPELLANT(S)/RESPONDENTS 1-4:
1 UNION OF INDIA,
REPRESENTED BY THE FINANCE SECRETARY, DEPARTMENT
OF REVENUE MINISTRY OF FINANCE, 3RD FLOOR, JEEVAN
DEEP BUILDING, SANSAD MARG, NEW DELHI, PIN - 110001
2 INTERIM BOARD FOR SETTLEMENT -II,
REPRESENTED BY ITS SECRETARY, 9TH FLOOR, LOK NAYAK
BHAVAN, KHAN MARKET, NEW DELHI, PIN - 110003
3 THE CENTRAL BOARD OF DIRECT TAXES,
REPRESENTED BY ITS CHAIRPERSON, DEPARTMENT OF
REVENUE - MINISTRY OF FINANCE, GOVERNMENT OF
INDIA, NEW DELHI, PIN - 110001
4 DEPUTY COMMISSIONER OF INCOME TAX,
CENTRAL CIRCLE - 2, M.G. ROAD, KOCHI, PIN - 682011
BY SRI.JOSE JOSEPH, SR. STANDING COUNSEL, INCOME TAX
DEPARTMENT, KERALA
BY SMT.SUSIE B VARGHESE, STANDING COUNSEL
BY SRI.NAVANEETH.N.NATH, CENTRAL GOVERNMENT COUNSEL
RESPONDENT(S)/PETITIONER:
M/S.REHABOTH INDIAN GYPSY NEW LIFE TRUST,
REPRESENTED BY ITS MANAGING TRUSTEE MR.RAJI JOHN
SIRUMUGAI ROAD, 1ST STREET, ANNUR, COIMBATORE,
PIN - 641653
W.A.Nos.2042 & 2106/24,
161, 162, 180, 183, 184 :: 10 ::
& 408/25
2025:KER:43582
BY ADV.SRI.R.SIVARAMAN
BY ADV.SMT.VANDANA VYAS
BY ADV SRI.N.KRISHNA PRASAD
THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON
16.06.2025 ALONG WITH W.A.NO.2042 OF 2024 AND CONNECTED
CASES, THE COURT ON 20.06.2025 DELIVERED THE FOLLOWING:
W.A.Nos.2042 & 2106/24,
161, 162, 180, 183, 184 :: 11 ::
& 408/25
2025:KER:43582
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR
&
THE HONOURABLE MR. JUSTICE P.M.MANOJ
FRIDAY, THE 20TH DAY OF JUNE 2025/30TH JYAISHTA, 1947
W.A.NO.183 OF 2025
AGAINST THE JUDGMENT DATED 22.08.2024 IN W.P(C).NO.44257
OF 2023 OF HIGH COURT OF KERALA
APPELLANT(S)/RESPONDENTS:
1 UNION OF INDIA,
REPRESENTED BY THE FINANCE SECRETARY DEPARTMENT OF
REVENUE - MINISTRY OF FINANCE, 3RD FLOOR, JEEVAN
DEEP BUILDING, SANSAD MARG, NEW DELHI, PIN - 110001
2 INTERIM BOARD FOR SETTLEMENT - II,
REPRESENTED BY ITS SECRETARY, 9TH FLOOR,
LOK NAYAK BHAVAN, KHAN MARKET, NEW DELHI,
PIN - 110003
3 THE CENTRAL BOARD OF DIRECT TAXES
REPRESENTED BY ITS CHAIRPERSON, DEPARTMENT OF
REVENUE - MINISTRY OF FINANCE, GOVERNMENT OF
INDIA, NEW DELHI, PIN - 110001
4 DEPUTY COMMISSIONER OF INCOME TAX,
CENTRAL CIRCLE - 2, M.G. ROAD, KOCHI, PIN - 682011
BY SRI.JOSE JOSEPH, SR. STANDING COUNSEL, INCOME TAX
DEPARTMENT, KERALA
BY SMT.SUSIE B VARGHESE, STANDING COUNSEL
BY SRI.NAVANEETH.N.NATH, CENTRAL GOVERNMENT COUNSEL
RESPONDENT(S)/PETITIONER:
M/S.SHEKINA PROPHETIC MISSION TRUST,
REPRESENTED BY ITS MANAGING TRUSTEE MR.PRABHUDAS J,
SIRUMUGAI ROAD, 1ST STREET, ANNUR, COIMBATORE,
W.A.Nos.2042 & 2106/24,
161, 162, 180, 183, 184 :: 12 ::
& 408/25
2025:KER:43582
PIN - 641653
BY ADV.SRI.R.SIVARAMAN
BY ADV.SMT.VANDANA VYAS
BY ADV SRI.N.KRISHNA PRASAD
THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON
16.06.2025 ALONG WITH W.A.NO.2042 OF 2024 AND CONNECTED
CASES, THE COURT ON 20.06.2025 DELIVERED THE FOLLOWING:
W.A.Nos.2042 & 2106/24,
161, 162, 180, 183, 184 :: 13 ::
& 408/25
2025:KER:43582
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR
&
THE HONOURABLE MR. JUSTICE P.M.MANOJ
FRIDAY, THE 20TH DAY OF JUNE 2025/30TH JYAISHTA, 1947
W.A.NO.184 OF 2025
AGAINST THE JUDGMENT DATED 22.08.2024 IN W.P(C).NO.44267
OF 2023 OF HIGH COURT OF KERALA
APPELLANT(S)/RESPONDENTS:
1 UNION OF INDIA,
REPRESENTED BY THE FINANCE SECRETARY MINISTRY OF
FINANCE, 3RD FLOOR, JEEVAN DEEP BUILDING, SANSAD
MARG, NEW DELHI, PIN - 110001
2 INTERIM BOARD FOR SETTLEMENT-II,
REPRESENTED BY ITS SECRETARY, 9TH FLOOR, LOK NAYAK
BHAVAN, KHAN MARKET, NEW DELHI, PIN - 110003
3 THE CENTRAL BOARD OF DIRECT TAXES,
REPRESENTED BY ITS CHAIRPERSON, DEPARTMENT OF
REVENUE - MINISTRY OF FINANCE, GOVERNMENT OF
INDIA, NEW DELHI, PIN - 110001
4 DEPUTY COMMISSIONER OF INCOME TAX,
CENTRAL CIRCLE - 2, M.G. ROAD, KOCHI, PIN - 682011
BY SRI.JOSE JOSEPH, SR. STANDING COUNSEL, INCOME TAX
DEPARTMENT, KERALA
BY SMT.SUSIE B VARGHESE, STANDING COUNSEL
BY SRI.NAVANEETH.N.NATH, CENTRAL GOVERNMENT COUNSEL
RESPONDENT(S)/PETITIONER:
M/S.HOLY BERACHAH MINISTRIES,
REPRESENTED BY ITS MANAGING TRUSTEE
MR.JESUPRASAD S.D., DOOR NO.18, G.C.COLONY,
QUEENS ROAD, BANGALORE, PIN - 560051
W.A.Nos.2042 & 2106/24,
161, 162, 180, 183, 184 :: 14 ::
& 408/25
2025:KER:43582
BY ADV.SRI.R.SIVARAMAN
BY ADV.SMT.VANDANA VYAS
BY ADV.SRI.N.KRISHNA PRASAD
THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON
16.06.2025 ALONG WITH W.A.NO.2042 OF 2024 AND CONNECTED
CASES, THE COURT ON 20.06.2025 DELIVERED THE FOLLOWING:
W.A.Nos.2042 & 2106/24,
161, 162, 180, 183, 184 :: 15 ::
& 408/25
2025:KER:43582
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR
&
THE HONOURABLE MR. JUSTICE P.M.MANOJ
FRIDAY, THE 20TH DAY OF JUNE 2025/30TH JYAISHTA, 1947
W.A.NO.408 OF 2025
AGAINST THE JUDGMENT DATED 22.08.2024 IN W.P(C).NO.44213 OF 2023
OF HIGH COURT OF KERALA
APPELLANT(S)/RESPONDENTS:
1 UNION OF INDIA,
REPRESENTED BY THE FINANCE SECRETARY, MINISTRY
OF FINANCE, 3RD FLOOR, JEEVAN DEEP BUILDING,
SANSAD MARG, NEW DELHI, PIN - 110001
2 INTERIM BOARD FOR SETTLEMENT-II,
REPRESENTED BY ITS SECRETARY, 9TH FLOOR, LOK NAYAK
BHAVAN, KHAN MARKET, NEW DELHI, PIN - 110003
3 THE CENTRAL BOARD OF DIRECT TAXES,
REPRESENTED BY ITS CHAIRPERSON, MINISTRY
OF FINANCE, GOVERNMENT OF INDIA, NEW DELHI,
PIN - 110001
4 DEPUTY COMMISSIONER OF INCOME TAX,
CENTRAL CIRCLE - 2, M.G. ROAD, KOCHI, PIN - 682011
BY SRI.JOSE JOSEPH, SR. STANDING COUNSEL, INCOME TAX
DEPARTMENT, KERALA
BY SMT.SUSIE B VARGHESE, STANDING COUNSEL
BY SRI.NAVANEETH.N.NATH, CENTRAL GOVERNMENT COUNSEL
RESPONDENT(S)/PETITIONER:
M/S.GROWTH IN FRATERNITY TRUST,
REPRESENTED BY ITS MANAGING TRUSTEE MR.THOMAS
N.S NO.106, 2ND STREET, 'E' CROSS, OMBR LAYOUT,
CHIKKABANASWADI, BANGALORE, PIN - 560033
W.A.Nos.2042 & 2106/24,
161, 162, 180, 183, 184 :: 16 ::
& 408/25
2025:KER:43582
BY ADV.SRI.R.SIVARAMAN
BY ADV.SMT.VANDANA VYAS
BY ADV SRI.N.KRISHNA PRASAD
THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON
16.06.2025 ALONG WITH W.A.NO.2042 OF 2024 AND CONNECTED
CASES, THE COURT ON 20.06.2025 DELIVERED THE FOLLOWING:
W.A.Nos.2042 & 2106/24,
161, 162, 180, 183, 184 :: 17 ::
& 408/25
2025:KER:43582
"C.R."
JUDGMENT
Dr. A.K. Jayasankaran Nambiar, J.
These Writ Appeals preferred by the Revenue impugn the
common judgment dated 22.08.2024 of a learned Single Judge in the
writ petitions.
The brief facts:
2. The writ petitions in question were filed by assessees under
the Income Tax Act, 1961 [hereinafter referred to as the “I.T. Act“],
aggrieved by the order of the Interim Board for Settlement that rejected
the applications preferred by them for settlement of their cases in
accordance with the provisions of Chapter XIX-A of the I.T. Act. The
reason cited by the Interim Board for Settlement for rejecting the
applications was that, although the applications for settlement had been
filed on or before 30.09.2021, which was the last date for receipt of valid
applications for settlement, there was no case pending in relation to the
assessee as on 31.01.2021, within the meaning of the provisions of
Section 245C(1), Section 245A of the I.T. Act read with the Central
Board of Direct Taxes [CBDT] Instructions F.No.299/22/2021-Dir
(Inv-III)/174 dated 28.09.2021, and hence the applications in question
W.A.Nos.2042 & 2106/24,
161, 162, 180, 183, 184 :: 18 ::
& 408/25
2025:KER:43582
were not maintainable before the Board. It is the legality of the said
stand taken by the Interim Board that was called in question in the writ
petitions.
3. In as much as a resolution of the dispute in these appeals
requires us to notice the statutory provisions that were in vogue during
the relevant period, we deem it apposite to extract those provisions
hereunder:
The statutory provisions:
Definitions:
245A. In this Chapter, unless the context otherwise requires,–
(a) xxxxxxxx
(b) "case" means any proceeding for assessment under this Act,
of any person in respect of any assessment year or assessment years which
may be pending before an Assessing Officer on the date on which an
application under sub-section (1) of section 245C is made.
(eb) “pending application” means an application which was filed
under section 245C and which fulfils the following conditions, namely: —
(i) it was not declared invalid under sub-section (2C) of section
245D; and
(ii) no order under sub-section (4) of section 245D was issued
on or before the 31st day of January, 2021 with respect to
such application;
Interim Boards for Settlement.
245AA. (1) The Central Government shall constitute one or more Interim
Boards for Settlement, as may be necessary, for the settlement of pending
applications.
(2) Every Interim Board shall consist of three members, each being an
officer of the rank of Chief Commissioner, as may be nominated by the
Board.
(3) If the Members of the Interim Board differ in opinion on any point, the
point shall be decided according to the opinion of the majority.
W.A.Nos.2042 & 2106/24,
161, 162, 180, 183, 184 :: 19 ::
& 408/25
2025:KER:43582
Income-tax Settlement Commission.
245B. (1) The Central Government shall constitute a Commission to be
called the Income-tax Settlement Commission for the settlement of cases
under this Chapter.
Provided that the Income-tax Settlement Commission so constituted shall
cease to operate on or after the 1st day of February, 2021.
Application for settlement of cases
245C.– (1) An assessee may, at any stage of a case relating to him,
make an application in such form and in such manner as may be prescribed,
and containing a full and true disclosure of his income which has not been
disclosed before the Assessing Officer, the manner in which such income
has been derived, the additional amount of income-tax payable on such
income and such other particulars as may be prescribed, to the Settlement
Commission to have the case settled and any such application shall be
disposed of in the manner hereinafter provided.
(5) No application shall be made under this section on or after
the 1st day of February, 2021.
CBDT order dated 28.09.2021
F.No.299/22/2021-Dir (Inv.III)/174
Government of India
Ministry of Finance
Department of Revenue
(Central Board of Direct Taxes)
*****
Civil Centre, New Delhi
Dated the 28.09.2021
ORDER
Subject: Order under section 119(2)(b) of the Income Tax Act, 1961 for filing
applications for settlement before the Interim Board for Settlement – reg.
The Finance Act, 2021has amended the provisions of the Act to inter alia
provide that the Income-tax Settlement Commission (ITSC) shall cease to operate
with effect from 01.02.2021. Further, it has also been provided that no application for
settlement can be filed on or after 01.02.2021, which was the date on which the
Finance Bill, 2021 was laid before the Lok Sabha. In order to dispose of the pending
settlement applications as on 31.01.2021, the Central Government has constituted
Interim Board for Settlement (hereinafter referred to as the “Interim Board”),vide
notification No.91 of 2021 dated 10.08.2021.
2. Meanwhile, in order to avoid genuine hardship to number of tax payers who
were in the advanced stages of filing their application for settlement before the ITSC
as on 01.02.2021 and also due to the hardship faced during the covid pandemic by
the tax payers, the Central Board of Direct Taxes (referred to as the “Board”) had
W.A.Nos.2042 & 2106/24,
161, 162, 180, 183, 184 :: 20 ::
& 408/25
2025:KER:43582
provided relief vide Press Release dated 07.09.2021 thereby allowing assessees
eligible to file application for settlement on 31.01.2021 to file such applications till
the extended period of 30.09.2021.
3. In view of the above, the Board in exercise of its power under clause (b) of
sub-section (2) of section 119 of the Income-tax Act, 1961 (the Act), in order to avoid
genuine hardship assessee authorizes the Commissioner of Income-tax, posted as
Secretary to the Settlement Commission prior to 01.02.2021, to admit an application
for settlement on behalf of the Interim Board filed after 31.01.2021, which is the date
mentioned in sub-section (5) of section 245C of the Act for filing such application,
and before 30.09.2021 and treat such applications as valid and process them as
“pending applications” as defined in clause (eb) of section 245A of the Act.
4. The above relaxation is available to the applications filed:-
(i) by the assessees who were eligible to file application for settlement
on 31.01.2021 for the assessment years for which the application is
sought to be filed (relevant assessment years); and
(ii) where the relevant assessment proceedings of the assessee are
pending as on the date of filing the application for settlement.
5. The Hindi version of the order shall follow.
Sd/-
Manish Gupta
Deputy Secretary (Inv.III)
CBDT, New Delhi
4. The respondents assessees in these appeals were all subjected
to search proceedings under Section 132 of the I.T. Act on various dates
prior to 31.01.2021. However, the notices invoking the provisions of
Section 153A/Section 153C were served on them only after 31.03.2021.
In the light of the statutory provisions noticed above, and the CBDT
order issued in terms of Section 119(2)(b) of the I.T. Act, the Interim
Board for Settlement found their applications for settlement to be not
maintainable because they didn’t satisfy the criteria of having a
‘pending case’ within the meaning of the term under the Statute, on or
before 31.01.2021.
W.A.Nos.2042 & 2106/24,
161, 162, 180, 183, 184 :: 21 ::
& 408/25
2025:KER:43582
Proceedings before the Single Judge:
5. The learned Single Judge who considered the writ petitions
found that in view of the decision of the Madras High Court in Jain
Metal Rolling Mills v. Union of India & Ors. –
[MANU/TN/6417/2023], that had since attained finality owing to the
dismissal of the SLP, preferred by the Revenue, by the Supreme Court,
the cut off date for determining the eligibility to file an application for
settlement had to be seen as 31.03.2021 as against the statutory
prescription of 31.01.2021, since the Finance Act, 2021 came into force
only with effect from 01.04.2021, and could not be seen as taking away
the vested right of an assessee to file an application for settlement in
respect of notices issued prior to 31.03.2021. The learned Judge then
went on to hold that the cut off date of 31.03.2021 was to be reckoned
with reference to the search proceedings initiated against the assessees
and the mere fact that the notices under Sections 153A/153C of the I.T.
Act were issued subsequently was of no consequence to the issue of
maintainability of the applications for settlement before the Board. The
writ petitions were therefore ordered with the following findings:
“………. Thus upon the interpretation that has been placed on the amended
provisions of Chapter XIX-A of the 1961 Act and taking into consideration of
the order issued under section 119(2) of the 1961 Act (Order bearing
F.No.299/22/2021-Dir (Inv.III)/174 dated 28-09-2021) the position that
emerges is this:-
(i) If in the case of the petitioners herein, the search under
Section 132 of the 1961 Act, was prior to or on 31-03-2021 they
would be entitled to maintain an application for settlement under
Section 245C of the 1961 Act;
(ii) Such applications could have been filed till 30-9-2021 in view
of the Order bearing F.No.299/22/2021 – Dir (Inv.III)/174 dated
28.09.2021 under Section 119(2)(b) of the 1961 Act and such
applications will be disposed of in accordance with the law by the
Interim Board for Settlement constituted under Section 245AA of the
W.A.Nos.2042 & 2106/24,
161, 162, 180, 183, 184 :: 22 ::
& 408/25
2025:KER:43582
1961 Act;
(iii) No application for settlement can be maintained if the search
was conducted on or after 01-04-2021 as the Settlement Commission
ceased to exist.
In that view of the matter and since it is not disputed before me that
the search under Section 132 in the case of all the petitioners in these
cases was prior to 31-03-2021, the persons/entities, who were subject
matter of the search, will be entitled to maintain an application for
settlement before the Interim Settlement Board, provided such application
has been filed on or before 30-09-2021. These writ petitions are therefore
ordered directing that if the search under Section 132 in respect of the
petitioners was prior to 31-03-2021, the petitioners are entitled to maintain
applications for settlement before the Interim Board for Settlement,
provided such applications were filed on or before 30-09-2021. Orders
issued by the Interim Board for Settlement finding the applications for
settlement filed by the petitioners as not maintainable will stand set aside.
The applications are restored to the files of the Interim Board for
Settlement, to be disposed of keeping in mind the declaration of the law
contained in this judgment.”
The contentions in the appeals:
6. In the appeals before us, the Revenue’s contentions, as
articulated by Sri.Jose Joseph, the learned Standing Counsel for the
Income Tax Department, are three fold viz.
● That the learned Single Judge erred in ignoring the plain
words used in the relevant provisions under Chapter XIX-A of the
I.T. Act, and reading into the said provisions concepts that were
expressly excluded through amendments that had been carried out
in the past;
● That when the express provisions of the I.T. Act defined a
pending case with reference to the period between the initiation of
proceedings and the culmination of those proceedings, and the
initiation of proceedings was pegged to the date of issuance of a
notice under Sections 153A/153C as the case may be, there was no
warrant for holding that a search proceedings under Section 132 of
the I.T. Act could also be seen as an initiation of proceedings for the
purposes of Chapter XIX-A of the I.T. Act; and
W.A.Nos.2042 & 2106/24,
161, 162, 180, 183, 184 :: 23 ::
& 408/25
2025:KER:43582
● That although the last date for preferring applications for
settlement had been extended upto 30.09.2021, the assessees
concerned had nevertheless to satisfy the eligibility criteria of
having received the notices under Sections 153A/153C on or before
31.03.2021.
7. The respondents, represented through the learned senior
counsel Sri.Jehangir D. Mistri and Sri.Anil D. Nair, Sri.R.Sivaraman and
Smt.Vandana Vyas, the learned counsel appearing with them, however
supported the impugned judgment and contended that the findings
therein did not warrant any interference. The following judgments were
also referred to in the course of their submissions:
Tata Iron & Steel Co. Ltd. v. N.C. Upadhyaya – [(1974) 96 ITR 1
(Bombay)]; Reliance Jute & Industries Ltd. v. Commissioner of
Income-tax – [(1979) 2 Taxman 417 (SC)]; Commissioner of
Income Tax v. Shah Sadiq & Sons – [(1987) 31 Taxman 498 (SC)];
UCO Bank v. Commissioner of Income-tax – [(1999) 104 Taxman
547 (SC)]; Godrej & Boyce Manufacturing Company Limited v.
State of Maharashtra & Ors. – [(2009) 5 SCC 24]; Jain Metal
Rolling Mills v. Union of India – [MANU/TN/6417/2023];
M/s.Pankaja Kasturi Herbals India Pvt. Ltd. v. ACIT & Ors. [W.P.
(C).No.28785 of 2023]; Sar Senapati Santaji Ghorpade Sugar
Factory Ltd. v. ACIT – [(2024) 161 Taxmann.com 166 (Bombay)];
ECGC Limited v. Mokul Shriram EPC JV – [(2022) 6 SCC 704];
Vishwakarma Developers v. Central Board of Direct Taxes –
[(2024) 165 Taxmann.com 391 (Bombay)]; Vetrivel Infrastructure
v. Deputy Commissioner of Income-tax – [(2024) 164
taxmann.com 123 (Gujarat)]; N.T. Veluswami Thevar v. G. Raja
Nainar and others – [AIR 1959 SC 422]; Sushil Kumar Goyal and
Ors. v. Principal Commissioner of Income-tax and Ors. – [(2023)
W.A.Nos.2042 & 2106/24,
161, 162, 180, 183, 184 :: 24 ::
& 408/25
2025:KER:43582
SCC OnLine Del 2921]; ACIT & Ors. v. Hailstone Innovations Pvt.
Ltd. & Anr. – [W.A.No.515 of 2024]; Union of India & Ors. v.
M/s.Believers Eastern Church – [W.A.No.2052 of 2024] and Union
of India & Ors. v. M/s.Love India Ministries – [W.A.No.153 of
2025].
Discussion and Findings:
8. On a consideration of the rival submissions, we find that the
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. Prior to that, the major amendments effected to the
provisions of Chapter XIX-A, that governed the eligibility of an assessee
to approach the Settlement Commission for a settlement of their cases,
and the procedure to be followed for the same, were in 2010, 2014 and
2015 through the respective Finance Acts of those years. Thereafter,
the substantive provisions governing eligibility of an assessee to
approach the Settlement Commission remained unchanged for over five
years when the Finance Act, 2021 was enacted, that provided for the
abolition of the Settlement Commission itself, and the settlement of
pending cases by an Interim Board for Settlement that was constituted
solely for that purpose.
9. On a reading of the statutory provisions as they stood during
the relevant time, it is unambiguously clear that in terms of Section
245C, an assessee could, at any stage of a case relating to him,
W.A.Nos.2042 & 2106/24,
161, 162, 180, 183, 184 :: 25 ::
& 408/25
2025:KER:43582
approach the Settlement Commission for a settlement of his case. The
eligibility condition for approaching the Settlement Commission was the
existence of a case relating to him, at the time of preferring the
application for settlement before the Commission. ‘Case’ for the
purposes of the Chapter meant any proceedings for assessment under
the I.T. Act, of any person, in respect of any assessment year or
assessment years, which was pending before an assessing officer on the
date on which the application for settlement was made. The word
‘pending’ had to be seen as referring to the status of a ‘case’ during the
period between its commencement and its conclusion or final resolution.
Towards this end, Explanation (iiia) to the definition of ‘case’ under
Section 245A(b) indicated both the termini – the stages of
commencement and conclusion – in relation to proceedings under
Sections 153A/153C, by clarifying that a proceeding for assessment or
re-assessment for any assessment years referred to in Section 153A or
Section 153C would be deemed to have commenced only on the date of
issuance of the notice initiating such proceedings and concluded on the
date on which the assessment was made. Thus, in the case of an
assessee who was served with a notice under Section 153A or Section
153C, he could approach the Settlement Commission with an application
for settlement, at any time after the receipt of the said notice but before
the completion of the assessment. More importantly, such an assessee
could not approach the Settlement Commission before the receipt of a
notice under Sections 153A/153C for he would not satisfy the criteria of
having a ‘case’ that was ‘pending’ before an assessing officer on that
W.A.Nos.2042 & 2106/24,
161, 162, 180, 183, 184 :: 26 ::
& 408/25
2025:KER:43582
date.
10. The only change that occurred in 2021 was the proposal to
abolish the Settlement Commission, which fructified through the
enactment of the Finance Act, 2021, whereby Section 245C was
amended to insert sub-section (5) thereof, to clarify that no application
for settlement could be made under Section 245C on or after 1 st
February, 2021. A simultaneous amendment to the I.T. Act, inserted
Section 245AA that constituted the Interim Board for Settlement for the
settlement of pending applications. Thus, the Finance Act, 2021
brought to an end, the option that was hitherto available to an assessee
under the I.T. Act to settle cases thereunder. The Interim Board for
Settlement was constituted solely to ‘tie up any loose ends’ by
completing the exercise of settlement in cases that were pending as on
the date of abolition of the Settlement Commission.
11. For the sake of completion, it needs to be noticed that there
was litigation that ensued at the instance of assessees, who found that
their vested right to opt for settlement under the I.T. Act had been taken
away with effect from a date that was anterior to the date of coming into
force of the Finance Act, 2021 viz. 01.04.2021. The said issue was
resolved through the judgment of the Madras High Court in Jain Metal
Rolling Mills (supra) that held that those amendments to the I.T. Act
could take effect only from 01.04.2021, and hence the assessees could
W.A.Nos.2042 & 2106/24,
161, 162, 180, 183, 184 :: 27 ::
& 408/25
2025:KER:43582
file applications for settlement upto 31.03.2021. The above declaration
of law has since attained finality through the dismissal of further
proceedings carried by the Revenue before the Supreme Court.
12. While so, through an order passed under Section 119(2)(b) of
the I.T. Act, the CBDT clarified that applications for settlement could be
filed upto 30.09.2021. However, the said relaxation was hedged in with
a condition that the eligibility requirement of having a ‘case’ that was
‘pending’ before an assessing officer, had to be satisfied as on
31.01.2021 (postponed to 31.03.2021 on account of the ruling in Jain
Metal Rolling Mills (supra)). In the context of the present litigation, it is
the above CBDT Circular that is really the cause for concern for the
assessees before us, all of whom have been served with notices under
Sections 153A/153C before 30.09.2021, but after 31.03.2021 – the
cut-off date prescribed in the CBDT order – for satisfying the eligibility
conditions for approaching the Interim Board for Settlement.
13. As already noticed, the real issue faced by the assessees is
with regard to the cut-off date prescribed in the CBDT order for
satisfying the eligibility conditions for preferring applications for
settlement under the I.T. Act. As for the eligibility conditions prescribed
by the Statute, such as the requirement of having a pending case as on
the date of filing the application for settlement, and as to what
constitutes a ‘case’ for the purposes of Chapter XIX-A, they had
W.A.Nos.2042 & 2106/24,
161, 162, 180, 183, 184 :: 28 ::
& 408/25
2025:KER:43582
remained unchanged, and unchallenged, for over five years prior to the
enactment of the Finance Act, 2021. The said provisions were therefore
not the reason for the prejudice perceived by the assessees. We feel,
therefore, that it was wholly unnecessary for the learned Single Judge to
have undertaken the interpretative exercise that he did, to hold that so
long as the search proceedings under Section 132 of the I.T. Act were
initiated against the assessees prior to 31.03.2021, their applications for
settlement, if filed before the Interim Board for Settlement on or before
30.09.2021, would be maintainable. In the light of the clear and
unambiguous provisions of the Statute that defined what a pending case
was, in the case of assessees who were served with notices under
Sections 153A/153C of the I.T. Act, and in the absence of any challenge
to the validity of those provisions, there was no need to read in an
artificial definition that would take in even search proceedings under
Section 132 of the I.T. Act within the ambit of the term ‘case’ in such
situations.
14. In our view, the only question that arises for consideration in
these cases is whether the assessees who received their notices under
Sections 153A/153C after 31.03.2021, but before 30.09.2021, can
maintain their applications for settlement of cases before the Interim
Board for Settlement ? Although this aspect was raised by the
assessees in the writ petitions, it was not considered by the learned
Single Judge in the impugned judgment. To resolve that issue, we need
W.A.Nos.2042 & 2106/24,
161, 162, 180, 183, 184 :: 29 ::
& 408/25
2025:KER:43582
only consider the legality of the conditions imposed by the CBDT while
extending the last date for filing applications for settlement to
30.09.2021. It is significant, in this context, that a Division Bench of the
Bombay High Court in Sar Senapati Santaji Ghorpade Sugar
Factory Ltd. v. Asst. Commissioner of Income Tax – [(2024) 161
Taxmann.com 166 (Bombay)] held as follows in a writ petition that
was filed challenging the provisions of the said CBDT order, to the
extent it laid down an additional condition that the assessee should
satisfy the eligibility requirements as on 31.01.2021, as ultra vires its
power under Section 119(2)(b) of the I.T. Act;
“24. As regards the notification dated 28 th September 2021 issued by the CBDT
under Section 119(2)(b) of the Act, the date for making application has been
extended by the said notification to 30 th September 2021, which is clearly within the
scope of the powers of the CBDT under Section 119 of the Act. Section 119 of the
Act provides that the Board may from time to time, issue such orders, instructions
and directions to other Income Tax Authorities as it may be deemed fit for proper
administration of this Act. The provisions of the section have been interpreted by the
Hon’ble Apex Court in UCO Bank (supra) to mean that the Board is entitled to tone
down the rigours of law by issuing circulars under Section 119 of the Act and such
circulars would be binding on Income Tax Authorities. A circular, however, cannot
impose on a taxpayer a burden higher than what the Act itself, on a true
interpretation, envisages. Therefore, the Board had power to extend the time limit for
making an application to 30th September 2021.
However, to the extent it lays down an additional condition, i.e., assessee should be
eligible to file an application for settlement on 31 st January 2021 in paragraphs 2 and
4(i) of the impugned notification, in our view, is beyond the scope of the power of
CBDT as per Section 119 of the Act. There is no provision in the Act providing a cut
off date with respect to an assessee being eligible to make an application under
Section 245C of the Act. Hence, such a condition in the impugned notification is
clearly invalid and bad in law.
The date on which an assessee becomes eligible to make an application and the date
on which the assessee makes an application are two different things and the Act only
provides a cut off date for the latter and not the former. Section 245C of the Act as
amended by the Finance Act, 2021, provides that an application shall not be made
after 1st February 2021, i.e., cut off date for making an application. However, there is
no provision in the Act with respect to the cut off date for an assessee to be eligible
to make an application. Further, there is no amendment to the definition of “case” in
Section 245A(b) read with the Explanation, which would affect the eligibility of
petitioner to file an application before the Settlement Commission between the
period 1st February 2021 and 31st March 2021. Hence, the impugned notification, to
that extent, is invalid and bad in law.”
15. We find ourselves in complete agreement with the said view
taken by the Bombay High Court. When Section 245C does not
W.A.Nos.2042 & 2106/24,
161, 162, 180, 183, 184 :: 30 ::
& 408/25
2025:KER:43582
prescribe any prior cut-off date for an assessee to satisfy the
requirements for filing an application before the Interim Board for
Settlement, and the only statutory requirement is that the assessee
should have a pending ‘case’ at the time of filing the application for
settlement, then so long as the assessee had a ‘live and un-adjudicated’
notice under Sections 153A/153C as on the date of filing the application,
the application had to be considered on merits by the Board. The CBDT
order issued under Section 119(2)(b), purportedly to relax the rigours of
a statutory provision, could not have merely extended the time limit for
filing an application while, simultaneously, denying the benefit of such
extension to a class of assessees. The said clause in the CBDT order has
to be seen as invalid, and bad in law, as declared by the Bombay High
Court in the decision referred above.
The upshot of the above discussions, therefore, is that:
1. We set aside the impugned judgment of the learned Single Judge
to the extent it holds that search proceedings under Section 132
would also fall within the ambit of ‘case’ in relation to the
respondent assessees for the purposes of Chapter XIX-A of the I.T.
Act. The writ appeals preferred by the Revenue are allowed to
that limited extent.
2. We find that the provisions of the CBDT order dated 28.09.2021,
to the extent it lays down an additional condition that the
assessees should satisfy the eligibility requirements as on
31.01.2021 (to be read as ‘31.03.2021’), is ultra vires the power
W.A.Nos.2042 & 2106/24,
161, 162, 180, 183, 184 :: 31 ::
& 408/25
2025:KER:43582
conferred on the CBDT under Section 119(2)(b) of the I.T. Act.
3. We, accordingly, direct that the applications for settlement filed
by respondent assessees before the Interim Board for Settlement
on or before 30.09.2021, taking note of notices under Sections
153A/153C of the I.T. Act issued to them between 31.03.2021 and
30.09.2021, be considered on merits by the Board. To that extent,
the directions in the impugned judgment, that require the Board
to consider the applications preferred by the respondent
assessees, are sustained and the Writ Appeals preferred by the
Revenue, dismissed.
Sd/-
DR. A.K.JAYASANKARAN NAMBIAR
JUDGE
Sd/-
P.M.MANOJ
JUDGE
prp/