Whether interim stay was to be granted against the notices during the pendency of the writ petition?

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[2021] 433 ITR 10 (Ker)
[IN THE KERALA HIGH COURT]
BLOSSOM GOLD COLLECTION P. LTD.

v.

UNION OF INDIA AND OTHERS
S. V. BHATTI and BECHU KURIAN THOMAS JJ.

March 1, 2021.

Section(s): Income-tax Act, 1961, ss. 143(2), 153B, Expln. (i), 153C, 245C
Favouring: Assessee, person /Direction/Observation, Condition, Qualification,
Clarification, Declaration
SETTLEMENT OF CASES — APPLICATION FOR SETTLEMENT OF CASE NOT
ACCEPTED BY COMMISSION IN VIEW OF CHANGE OF LAW — WRIT PETITION —
SINGLE JUDGE DIRECTING ACCEPTANCE OF APPLICATION FOR SETTLEMENT
WITHOUT GRANTING INTERIM STAY — APPEAL — ORDER MODIFIED AND

INTERIM STAY OF PROCEEDINGS PURSUANT TO NOTICES GRANTED — INCOME-
TAX ACT, 1961, ss. 143(2) , 153B , EXPLN. (I), 153C , 245C — CONSTITUTION OF

INDIA, ART. 226
The assessee received notices dated January 14, 2020 and November 23, 2020 under
sections 153C and 143(2) of the Income-tax Act, 1961. The Finance Bill, 2021 repealed
section 245C with effect from February 1, 2021. Since the assessee was denied the
statutory right to move for settlement of its case and the Settlement Commission did not
receive the application, the assessee filed a writ petition. The single judge directed the
Settlement Commission to receive the application of the assessee for settlement filed
under section 245C but declined to grant stay of proceedings on the notices. On appeal :
Held, allowing the appeal, that consideration of the plea for stay of proceedings on the
notices issued under sections 153C and 143(2) would not cause prejudice or hardship
to the Department, in view of Explanation (i) to section 153B and if the notices resulted
in assessment orders, the claim or right of the assessee would be adversely affected.
The single judge while prima facie accepting the contention of the assessee directed
acceptance of the application of the assessee under section 245C . The Department, as
on date, had not challenged the order of the single judge directing receipt of the application
of the assessee under section 245C . Accordingly the order was to be modified as follows :
(i) interim stay was to be granted against the notices during the pendency of the writ
petition, (ii) the interim order granted would not in any manner, restrict the discretion
available to the authorities under Chapter XIX-A either to admit or process the application

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of the assessee for settlement, or withdraw and summon the assessment files to the office
of the Settlement Commission from the office of the Assessing Officer, and (iii) the interim
order and corollary thereto were subject to the final outcome of the writ petition.
CIT v. Express Newspapers Ltd. [1994] 206 ITR 443 (SC) referred to.
W. A. No. 405 of 2021 .
Aravind P. Datar, Senior Advocate, K. P. Abdul Azees, Akhil Suresh and Smt. T.
Archana, for the appellant. P. K. R. Menon, Senior Advocate, for the respondent.

JUDGMENT

Page No : 11
The judgment of the court was delivered by
1. S. V. Bhatti J.—The writ petitioner is the appellant. The intra-court

appeal is directed against the interim order dated February 22, 2021 refus-
ing to grant interim stay of exhibits P1 and P2 series.

2. Chapter XIX-A of the Income-tax Act, 1961 deals with settlement of
cases. The Union Finance Bill, 2021, with effect from February 1, 2021
repealed section 245C of Chapter XIX-A of the Income-tax Act, 1961 (for
short "the Act"). The petitioner received notices dated January 14, 2020
and November 23, 2020 under sections 153C and 143(2) of the Act. The
petitioner, with effect from February 1, 2021, since is denied the statutory

right available to an assessee to move for settlement of cases under Chap-
ter XIX-A and also that the Settlement Commission from February 1, 2021

was not receiving the applications from the assessee, has filed the instant
writ petition for appropriate directions, including a direction to receive the
application of the petitioner under section 245C of the Act. The petitioner
refers to and relies on the interim order of the High Court for the State of
Telangana in Writ Petition No. 3181 of 2021, the interim order of the
Madras High Court in W. P. (C) No. 3001 of 2021 and W. M. P. No. 3365 of
2021 in support of the petitioner's case for grant of interim stay of exhibits
P1 and P2 notices, stated supra. The learned single judge, through the

order under appeal, directed the second respondent to receive the appli-
cation of the petitioner for settlement filed under section 245C of the Act,

however, declined to grant stay of exhibits P1 and P2 series. Hence the
appeal.
3. The senior counsel Sri Aravind P. Datar appearing for the appellant
argues that the interim orders granted by the High Court for the State of

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advocate amit kumar gupta9811291390amitkrg246@yahoo.com