2008 (6) TMI 581 - Commission - Income Tax

Summary

Issues Involved:
1. Whether assessment proceedings are pending for years where returns have been filed but not processed or notices not issued.
2. Whether assessment proceedings are pending for years where returns have been processed but time for issuing notices has expired.
3. Interpretation of the term "date of conclusion of proceeding" u/s 245A(b)(iv).
4. Validity of a composite settlement application for multiple years with mixed pendency status.

Summary:

First Issue:
The Special Bench concluded that for the years where returns have been filed but neither processed u/s 143(1) nor notices issued u/s 143(2), the assessment proceedings are considered pending.

Second Issue:
For the years where returns have been processed u/s 143(1) but the time for issuing notices u/s 143(2) has expired, the assessment proceedings are still considered pending. This conclusion is supported by the CBDT circular explaining that an intimation u/s 143(1) is not an assessment order, and the assessment is deemed completed only upon the service of the assessment order.

Third Issue:
The term "date of conclusion of proceeding" u/s 245A(b)(iv) was interpreted to mean that proceedings for assessment are pending only as long as the Assessing Officer has the power to take action. The Bench favored a harmonious construction over a strict literal interpretation to avoid absurd results, concluding that proceedings are pending only for years where the Assessing Officer can still initiate action.

Fourth Issue:
The Bench decided that a composite settlement application need not be declared invalid if assessment proceedings are pending for some years and not for others. The application can proceed for the years where proceedings are pending.

Conclusion:
The settlement application was not declared invalid, and the decision was in favor of the assessee.