ASHISH PRAFULBHAI PATEL Vs. INCOME TAX SETTLEMENT COMMISSION

JUDGEMENT

(1.) This petition is filed challenging an order dated 4.10.2007 passed by respondent no.1 Income Tax Settlement Commission ("the Commission" for short) by which the petitioner's application dated 28.5.2007 for settlement of the petitioner's cases for the assessment years 2001-2002 to 2007-2008 came to be declared as having abated on the ground that the petitioner failed to pay the full tax and interest before the last date provided under the statute i.e. 31.7.2007. The petitioner has also challenged the constitutionality of sections 245D(2A), 245D(2D) and 245HA of the Income Tax Act, 1961 ("the Act" for short) inserted by the Finance Act 2007 as ultra vires Article 14 of the Constitution.

(2.) The petition arises in the following background. The petitioner is an individual. The petitioner's assessments for the assessment years 2001-2002 to 2007-2008 were pending at various original or appellate stages. In order to avail of the benefit of the scheme for settlement of cases provided in Chapter XIXA of the Act, the petitioner applied to the Commission for settlement of cases pertaining to his assessments for the assessment years 2001-2002 to 2007-2008 by filing an application on 28.5.2007. No order on such application was passed under subsection(1) of section 245D of the Act allowing the application to proceed further before 1.6.2007.

(3.) By the Finance Act, 2007, significant changes were made in the provisions contained in Chapter XIXA of the Act pertaining to settlement of cases. We would advert to the relevant provisions before and after such amendments at a later stage. At this stage, we may however note that prior to such amendments, the assessee applying for settlement of his case though was required to make payment of tax with interest on admitted income, the statute did not provide for any adverse effect on his application for settlement till its disposal by the Settlement Commission, if the assessee failed to make the payment of such tax or interest. By virtue of the amendments brought about through the Finance Act, 2007, the legislature now required that payment of admitted tax with interest should accompany the application for settlement. For the pending cases, the applicants were given time upto 31.1.2007 to make such payment, failing which, the application for settlement would abate.