In a significant judgment, the Kerala High Court has allowed an income tax settlement application filed beyond the statutory cutoff date, giving weight to the Supreme Court’s special order extending limitation periods due to the COVID-19 pandemic.
The Division Bench comprising Justice Dr. A.K. Jayasankaran Nambiar and Justice P.M. Manoj ruled in favor of the assessee, Mr. Thomas Joseph, allowing his delayed application under Section 245A of the Income Tax Act, which had been previously rejected by the Interim Board for Settlement.
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The court referred to the Supreme Court’s orders in MA Nos. 665/2021 and 21 & 29/2022, which had extended the limitation periods for various legal proceedings affected by the pandemic. According to these orders, if any limitation expired between 15.03.2020 and 28.02.2022, the parties were granted a fresh 90-day period from 01.03.2022, or the balance limitation period, whichever was longer.
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Timeline of Events
- Mr. Joseph received notices under Section 153A between 31.03.2021 and 30.09.2021.
- Although prepared earlier, his application for settlement could only be filed on 17.03.2022, after he was granted access to digital and seized materials on 04.10.2021.
- The application was initially rejected by the Interim Board stating that no proceedings were pending as of 31.01.2021.
- Mr. Joseph then approached the court, which allowed him to file the application provisionally.
- The High Court found that the application fell within the Supreme Court’s extended limitation period.
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“The objection raised on the ground that the application was filed beyond the cutoff date does not stand in light of the Supreme Court’s COVID limitation ruling,”
— clarified the judges.
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Furthermore, the High Court ruled that the CBDT’s additional eligibility condition requiring proceedings to be pending as of 31.01.2021 was ultra vires, reaffirming its stance in earlier judgments including WA No. 2042 of 2024.
The court directed the Interim Board for Settlement to consider the application on merits for Assessment Years 2015-16 to 2020-21, but excluded AY 2021-22 from relief since the pre-conditions for settlement were not satisfied for that year.
Case Title: Mr. Thomas Joseph v. Union of India
Case No.: WA No. 430 of 2025
Counsel for Appellant: Adv. Aditya Unnikrishnan & team