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2016 (7) TMI 676 - HC - Income TaxApplication to Settlement Commission - validity of notice u/s 142(1) - petitioner s grievance is that the impugned notices are without jurisdiction, as the assessment for the A.Ys. 2008-09 and 2009-2010 have been admitted for consideration by the Settlement Commission - Held that - The concluding paragraph in the order of the Settlement Commission dated 10th May, 2016 allowing the application for settlement to proceed with further, the impugned notices are without jurisdiction. However, the distinction which is sought to be made on behalf of the Revenue does not find any mention in the operative part of the order dated 10th May, 2016. Therefore according to us, the impugned notices are without jurisdiction as it is not open to an Assessing Officer to oust the jurisdiction of Settlement Commission in the face of Section 245F(2) of the Act. In case the Revenue reads the order differently particularly in view of the sentences extracted herein above relied upon by Mr. Suresh Kumar then the appropriate remedy would be to seek a clarification and/or rectification of the order dated 10th May, 2016 from the Commission before issuing the impugned notices. The Assessing Officer is a creature of the statute and must not act in a manner which would denude the Commission of the powers bestowed upon it under the Act. Therefore at this stage, we see no reason to let the impugned notices continue and therefore, we quash and set aside the impugned notices dated 8th June, 2016, 14th June, 2016 and 23rd June, 2016. - Decided in favour of assessee
Issues:
Challenge to jurisdiction of notices issued under Section 142(1) of the Income Tax Act, 1961 for assessment years 2008-09 and 2009-2010 due to settlement proceedings before the Settlement Commission. Analysis: The petitioner challenges the jurisdiction of notices issued under Section 142(1) of the Income Tax Act, 1961 for the assessment years 2008-09 and 2009-2010, as settlement proceedings have been initiated before the Settlement Commission. The petitioner argues that the impugned notices are without jurisdiction since the Settlement Commission has admitted the assessment for consideration, as per the order dated 10th May, 2016 under Section 245D(2C) of the Act. The petitioner relies on Section 245F(2) of the Act, which states that the Settlement Commission alone would have jurisdiction over proceedings once an application for settlement is allowed to proceed. The petitioner emphasizes a specific paragraph from the order dated 10th May, 2016, indicating that the applications have been allowed to proceed further under Section 245D(4) of the Act, thereby questioning the validity of the impugned notices. The Revenue, represented by Mr. Suresh Kumar, justifies the impugned notices based on an observation in the order dated 10th May, 2016 by the Settlement Commission. The Revenue argues that only disclosed additional income, not declared during regular assessment proceedings, would qualify for settlement. However, the distinction made by the Revenue is not explicitly mentioned in the operative part of the order dated 10th May, 2016. The court concludes that the impugned notices are without jurisdiction as the Assessing Officer cannot oust the Settlement Commission's jurisdiction, as per Section 245F(2) of the Act. The court suggests seeking clarification or rectification from the Commission before issuing such notices if the Revenue interprets the order differently. Consequently, the court quashes and sets aside the impugned notices dated 8th June, 2016, 14th June, 2016, and 23rd June, 2016. In allowing the petition, the court excludes a further period of six weeks for computing the limitation period to issue the notices if it has not expired. The court notes the petitioner's argument regarding the academic nature of the proceedings due to the expiration of the period to pass an order for the assessment years 2008-09 and 2009-10 but refrains from examining it. The court clarifies that it cannot comment on this aspect as it is not required for the present decision. Finally, the court allows the petition with no order as to costs.
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