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1. Jurisdiction of CIT(A) in passing orders during Settlement Commission proceedings 2. Dismissal of appeals by CIT(A) based on Settlement Commission's acceptance of settlement petitions 3. Consequences of CIT(A) orders on assessee's rights and remedies Jurisdiction of CIT(A) in passing orders during Settlement Commission proceedings: The judgment involves three sets of appeals by the assessee against the quantum and order under section 185 for assessment years 1981-82, 1982-83, and 1983-84. The CIT(A) had dismissed the appeals on the ground that the settlement petitions filed by the assessee were accepted by the Settlement Commission. The assessee contended that the CIT(A) had no jurisdiction to pass the impugned order under section 245F of the I.T. Act, 1961. The Tribunal analyzed the statutory provisions and held that on the admission of the application for settlement, exclusive jurisdiction was conferred on the Settlement Commission until an order was passed under sub-section (4) of section 245D. The Tribunal found that the CIT(A) could not exercise jurisdiction and powers until the Settlement Commission passed an order under the specified provision. The Tribunal emphasized that the statutory intention was clear in not allowing the assessee to proceed simultaneously before both authorities for the same matter. Consequently, the Tribunal set aside the orders of the CIT(A) and directed to keep them in abeyance until the matters were settled by the Settlement Commission, ensuring that the appeals could be revived if the matter was not settled. Dismissal of appeals by CIT(A) based on Settlement Commission's acceptance of settlement petitions: The Commissioner of Income-tax (Appeals) had dismissed the appeals filed by the assessee solely on the ground that the settlement petitions filed before the Settlement Commission were accepted. The assessee argued that the dismissal of appeals would jeopardize their interests, especially if the Settlement Commission decided to send the case back to the assessing officer for non-cooperation. The Tribunal noted that the CIT(A) had not decided the appeals on their merits, considering the matters were pending before the Settlement Commission. The Tribunal opined that the CIT(A) should have kept the matter in abeyance until the Settlement Commission's decision, as the proceedings would become infructuous if settled. The Tribunal concluded that the CIT(A) should have refrained from dismissing the appeals based solely on the admission of settlement applications, as it could lead to the loss of alternative remedies for the assessee. Consequences of CIT(A) orders on assessee's rights and remedies: The assessee's counsel highlighted that if the CIT(A) dismissed the appeals, the assessee would face difficulties in seeking remedies in case of non-cooperation with the Settlement Commission. The counsel argued that the right approach for the CIT(A) would have been to keep the appeals pending until the Settlement Commission's final decision. The Tribunal agreed with the assessee's contentions and emphasized that the CIT(A) should have refrained from passing orders without considering the pending settlement proceedings. The Tribunal, considering the legal and factual aspects, allowed the appeals, setting aside the CIT(A) orders and restoring them for keeping in abeyance until the Settlement Commission made an effective decision under the specified provision, enabling the assessee to agitate the matter afresh before the CIT(A) if needed.
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