1989 (12) TMI 87 - AT - Income Tax

Summary

Issues:
- Appeal by Revenue against order setting aside assessment orders
- Validity of setting aside assessment orders by CIT(A)
- Jurisdiction of income-tax authorities post-admission by Settlement Commission

Analysis:
The judgment involves appeals by the Revenue challenging the order of the Commissioner of Income-tax(A) setting aside assessment orders passed by the Income Tax Officer (ITO) for the assessment years 1971-72 & 1972-73. The Commissioner directed that fresh assessment orders should be passed in accordance with the final orders of the Settlement Commission. The Settlement Commission had admitted the assessee's petition under section 245C, leading to a jurisdictional issue regarding the authority of the income-tax authorities post-admission by the Settlement Commission.

The Tribunal considered the provisions of section 244F(2) of the Income-tax Act, 1961, which states that after an application under section 245C is allowed to proceed, the Settlement Commission has exclusive jurisdiction until a final order is passed. The Tribunal emphasized that upon admission of the application by the Settlement Commission, neither the ITO nor the Commissioner of Income-tax(A) retained the authority to pass any orders related to the case. Therefore, the CIT(A) setting aside the assessment orders and directing fresh orders was deemed unauthorized and erroneous.

The Tribunal highlighted that the Settlement Commission, under section 245D(4), is responsible for passing orders to make the settlement effective, including any demands for tax, penalty, or interest. The Tribunal noted that if a settlement is found void due to fraud or misrepresentation, the assessment orders could be revived. However, by setting aside the assessment orders, the CIT(A) created a situation where the assessments could not be revived, despite the provisions in section 245D(6).

The Tribunal also discussed sections 245C and 245BA, emphasizing that these sections do not provide for the setting aside of assessment orders by the CIT(A) post-admission by the Settlement Commission. Ultimately, the Tribunal concluded that the CIT(A) had no jurisdiction to proceed with the appeals after the Settlement Commission's order admitting the application, leading to the decision to allow the appeals by the Revenue and set aside the orders passed by the CIT(A).