Section 245D

Section 245D — the law in short

What the courts have decided on section 245D, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• Vijay Krishnaswami v DDIT (Investigation) Supreme CourtHelps taxpayer
  The Settlement Commission accepted my disclosure. Can the department still prosecute me for evasion?
  No. Every order of settlement is conclusive under s.245-I, so where the Commission has recorded full and true disclosure the factual foundation for a wilful attempt to evade under s.276C(1) is gone and continuing the prosecution is an abuse of process. The prosecution was quashed and costs of Rs. 2,00,000 were imposed on the Revenue.
• B.M. Malani v CIT Supreme CourtHelps taxpayer
  The Commissioner refused to waive the interest on my demand because I own property worth crores. Is owning assets an answer to genuine hardship?
  No, not by itself. The Supreme Court set aside the High Court's judgment and remitted the waiver application to the Commissioner to be considered afresh. Genuine means real, not fake, not a ruse; genuine hardship means a genuine difficulty; and it does not follow that a person holding large assets can never be in difficulty merely because he could sell them and pay. The Court also held that the authority had to take into account what the assessee had actually offered to do - here, that he had asked the department to sell the securities it had seized and appropriate the proceeds towards his tax - and that the department's silence on that offer told against it.
• Jain Metal Rolling Mills v Union of India High CourtHelps taxpayerNo later treatment found
  I filed a settlement application in March 2021. Can it be rejected using the 1 February 2021 cut-off?
  No. The cut-off of 1 February 2021 in s.245C(5) is read down and substituted by 31 March 2021, because the Settlement Commission continued to exist both legally and factually until that date. Assessees who were eligible and who filed, or could have filed, applications up to 31 March 2021 keep the right to have them dealt with by the Interim Board, and the CBDT order of 28 September 2021 has to be read the same corrected way.
• SREI Infrastructure Finance Ltd v Income Tax Settlement Commission High CourtHelps department
  My client moved its finance division to a subsidiary under a scheme of arrangement sanctioned by the Company Court, not under a sale deed. The Settlement Commission has taxed it under s.50B. Can a statutory scheme be a slump sale at all?
  Yes. The Delhi High Court held that the word 'sale' inside the expression 'slump sale' does not cut down the wide meaning of 'transfer' in s.2(47), so any transfer of an undertaking for a lump sum without values being assigned to individual assets falls within s.2(42C) and s.50B — including a transfer effected by a scheme sanctioned under ss.391-394 of the Companies Act 1956. The writ petition was dismissed.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.