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TMI Blog2012 (11) TMI 766X X X X Extracts X X X X X X X X Extracts X X X X ..... (b). Thus, there is no question of proceedings of the type which are subject matter of this petition can be said to be "pending" - Assessment includes re-assessment too - impugned order of the Settlement Commission admitting the assessee's application, was contrary to law. The impugned order is accordingly set aside. The writ petition is consequently allowed. - W.P.(C) No. 213 OF 2012 AND C.M. APPL. No. 452 OF 2012 - - - Dated:- 20-11-2012 - S. RAVINDRA BHAT AND R.V. EASWAR, JJ. ORDER S. Ravindra Bhat, J. - In this writ petition, the revenue challenges the impugned order passed by the Income Tax Settlement Commission (Commission, in short) dated 21.10.2011 whereby the Settlement Commission, by a majority of 2:1 admitted applications under section 245C, Income Tax Act, 1961 (the Act, in short) for settlement of cases even after the expiry of the time limit prescribed for making an order of assessment under section 143/144 of the Act. 2. In this view, the short question that arises for consideration in this writ petition is whether proceedings are to be deemed to remain "pending" for the purposes of section 245A(b) when the time limit for completion of assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or of Income Tax (International Taxation) Kolkata v. Income Tax Settlement Commissioner, Additional Bench, Kolkata Anr., [2012] 1 CAL LT 309 (HC). Reliance was also placed on Rambhai Jethabhai Patel v. Commissioner of Income Tax, Gujarat-I, [1997] 108 ITR 771 (Guj) and Fordham v. Clagett, [1882] 20 Ch. D. 637 and Asgarali Nazarali v. The State Of Bombay AIR 1957 SC 503. 7. Learned counsel on behalf of the assessee, on the other hand, defended the majority view taken in the impugned order. He underlined Explanation (iv) to section 245A(b) to suggest that a statutory fiction had been created in terms of which a case is deemed to have commenced on the first day of the assessment year and concluded on the date on which the assessment is made. It was moreover contended that the definition of assessment included reassessment, and that once a notice under Section 148 is issued for reopening an assessment, the assessee has to file a return again, as if such return were filed under Section 139. Based on this, it was contended that once such return under Section 139 is filed afresh, the period for making an order for assessment under Section 143 would renew. This would imply that even af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and concluded on the date on which the assessment is made; 9. At the very outset, this Court notices that exactly the same question has been answered by the Single Judge of the Calcutta High Court in Outotech Group case (supra). The reasoning and conclusion of the learned Single Judge is as under: "31. If the aforesaid test is applied proceedings could only be said to be pending for as long as any proceedings could be taken, excluding proceedings under section 147 which consciously been excluded by Parliament in its wisdom. 32. An application [sic] appended to a section, to explain the meaning of words contained in that section, should normally be read to harmonize with and clear up any ambiguity in the main section and should not be construed to widen the ambit of the section. 33. It is difficult to accept the submission that Explanation iv to section 245A(b) is to be construed to provide that proceedings for assessment could only conclude with the passing of an assessment order of assessment and if no order of assessment was made, such proceedings would be deemed to continue for a period of six years and nine months from the end of the relevant assessment year, within whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d above, literal construction of Explanation iv would give rise to absurdity. This Court meaningfully construes the said explanation to mean that pending assessment proceedings would conclude with an order of assessment, and where no order of assessment is made, the proceedings would lapse, when an order can no longer be made, by reason of expiry of the statutory time limit under section 153(1). 39. This Court is constrained to hold that irrespective of whether returns were filed or not, a case would be deemed to be pending but only for twenty one months from the end of the assessing year in question, i.e. the period within which an assessment could have been made. Once the aforesaid time period expires, it cannot be said that the proceedings are pending. 40. If the time period to make an assessment had not expired on the date on which the settlement application was made, the commission might entertain and proceed with the same, irrespective of whether income tax returns had been filed or not. However, where the period of twenty one months from the end of the assessment year expired on the date of making of the application, the settlement application cannot be proceeded with." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding arbitrations) 2. While awaiting; until (the injunction was in force pending trial)." 12. Stroud's Judicial Dictionary, Edition 3, Volume 3, page 2141, defines "pending" in this manner: "Pending : (1) A legal proceeding is 'pending' as soon as commenced and until it is concluded, i.e., so long as the court having original cognizance of it can make an order on the matters in issue, or to be dealt with, therein." 13. It can be clearly seen that there must exist a live cause or matter, which the concerned court or tribunal is capable of resolving through its determination. Conversely, something cannot be said to be "pending" if the judicial tribunal ceases to legally have jurisdiction over it. 14. In view of this position, this Court is agreement with the view taken by the Calcutta High Court. It is inconceivable how proceedings could have been deemed to continue indefinitely, in cases where no assessment order is made under Section 143/144 as in this case. Explanation (iv) to section 245A(b) cannot be construed so literally so as to leave the "proceedings" in limbo for an eternity. The rule prescribed in Section 153(1) must be given effect to despite Explanation (iv). It ..... X X X X Extracts X X X X X X X X Extracts X X X X
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