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TMI Blog2014 (1) TMI 1090X X X X Extracts X X X X X X X X Extracts X X X X ..... efore the AO or it is still possible for him to pass any order of assessment - There is no reason to interfere with the order of the Settlement Commission dated 15 March 2013 - In view of Section 245HA of the Act, proceedings before the Settlement Commission shall abate under Section 245HA(1)(i) of the Act in respect of those years - Decided against petitioner. - Writ Petition No.750 of 2013 - - - Dated:- 17-1-2014 - Mohit S. Shah, C.J. And M. S. Sanklecha,JJ. For the Petitioner : Mr. Sharan Jagtiani with Ms. Prachi Dhanani and Ms. Atika Vaz i/by M/s. Wadia Ghandy Co. For the Respondent : Mr. Tejveer Singh JUDGMENT (Per M. S. Sanklecha, J.): At the request of the Counsel for both sides the petition is being disposed of at the stage of admission. 2. This petition under Article 226 of the Constitution of India challenges: i) the order dated 15 March 2013 passed by the Settlement Commission i.e. respondent No.1 under Section 245D(1) of the Income Tax Act, 1961 ( the Act ) rejecting the petitioner's application for settlement for the Assessment Years 2007-08, 2008-09 and 2009-10; and ii) two notices dated 30 March 2013 issued by the Deputy Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nding for those assessment years before the Assessing Officer when the application for settlement was filed. In support of its aboveconclusion the Settlement Commission relied upon the decision of the Gujarat High Court in Amrish Kumar Shukla reported as CIT vs. Income Tax Settlement Commission 210 Taxman Page 259 and the Kolkatta High Court in Outotec (W. P. No.341/2011 unreported decision dated 1 August 2011) titled as Director of Income Tax vs. Income Tax Settlement Commission. g) As pointed out above the petitioner challenges the order dated 15 March 2013 of the Settlement Commission and the two notices dated 30 March 2013 for reopening of assessment for assessment year 2008-09 and 2009-10. 3) Mr. Sharan Jagtiani, learned Counsel in support of the petition submitted as under: a) The petitioner's assessment proceedings for assessment years 2007-08 to 2009-10 were pending proceedings as defined in Section 245A(b) of the Act when the application for settlement was filed on 7 March 2013. This was for the reason that on 7 March 2013 it was open to the Assessing Officer to initiate proceedings for assessment/reassessment under Section 147/148 of the Act and no such notice had b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be pending proceedings before the Assessing Officer. e) The challenge to the two notices dated 30 March 2013issued under Section 147/148 of the Act is consequential to the challenge to the order dated 15 March 2013 of the Settlement Commission. This is because if the challenge to the order dated 15 March 2013 of the Settlement Commission is upheld then the two notices dated 30 March 2013 are exfacie without jurisdiction. 4) As against the above, Mr. Tejveer Singh Counsel appearing for the revenue in support of the impugned order dated 15 March 2013 submitted as under: a) The decisions of the Gujarat High Court in Amrish Kumar Shukla (supra) and Kolkatta High Court in Autolec Ltd. (supra) on which the impugned order places reliance conclude the issue raised by the petitioner in favour of the revenue. b) It is an undisputed position that the time to make an assessment order for the assessment years 2007-08 to 2009-10 has already expired under Section 153 of the Act. Consequently no assessment order in regular assessment proceedings could be made by the Assessing Officer on 7 March 2013 when the settlement application was filed. Therefore the proceeding for assessment years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from 1 June 2007, we shall now consider the respective submissions of the Counsel for the parties. The linchpin of the petitioner's submissions is that on 7 March 2012 assessment proceedings for assessment years 2007-08 to 2009-10 were pending before the Assessing Officer for the reason that it was still open to the Assessing officer to issue notices under Section 147/148 of the Act for assessment/reassessment proceedings in respect of the subject years i.e assessment years 2007-08 to 2009-10. The exclusion clause in Section 245A(b) of the Act comes into play only on issue of a notice under Section 148 of the Act which was admittedly not done up to 7 March 2013 when the application for settlement was filed by the petitioner with the Settlement Commission. However, the proceeding under Section 147/148 of the Act by its very nature will only lie where the earlier assessment proceeding are not pending. This is self evident as the jurisdictional requirement under Section 147/148 of the Act is that income chargeable to tax has escaped assessment. Therefore where the assessment was still pending (in case where returns have been filed) no occasion of income escaping assessment can aris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is noticed that income has been understated. In the aforesaid two situations among others mentioned therein it would be deemed that income chargeable to tax has escaped assessment. However these are jurisdictional issues which would arise as and when a notice is issued under Section147/148 of the Act. The issue arising in this case is whether the assessments were pending on 7 March 2013 when the application for settlement was filed. The answer to the same, in our view is an unmistakable NO for the reason that by virtue of Section 153 of the Act the assessment proceedings before the Assessing Officer stand terminated by efflux of time. 10) Mr. Jagtiani submitted that the legislative intent supported the petitioner's view as was evident from explanation (i) to Section 245A of the Act. The aforesaid explanation excludes the assessment/reassessment proceeding from the definition of case from the date of the issue of notice under Section 147 of the Act. It was vehemently submitted that till such time a notice can be issued under Section 148 of the Act, it was open to a party to file an application for settlement. Though the argument may prima facie appear to be attractive, on a cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der has not expired under Section 153 (two years) of the Act. Therefore, the Circular No.3/2008 dated 12 March 2008 does not deal with a fact situation as arising in the present case viz. Where the time to make an assessment order has expired under Section 153 of the Act, would it still be considered as a pending proceeding? Therefore, in our view above Circular No.3/2008 dated 12 March 2008 is of no assistance to the petitioner in the present facts. 12) The petitioner thereafter placed reliance upon Explanation (iv) to Section 245A(b) of the Act to contend that for the purposes of Chapter XIXA of the Act which to the extent is relied upon reads as under: a proceeding for assessment for any assessment year ..........shall be deemed to have commenced from the 1st day of the assessment year and concluded on the date on which the assessment is made On the above basis it is contended that for the purpose of Chapter XIXA of the Act, Section 153 of the Act should be ignored and the assessment continue to be pending till the date the assessment is made. This does not appear to be correct. Chapter XIXA of the Act does not provide that the period of limitation as provided under Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r assessment year, comes to an end, on the expiry of the period under Section 153 of the Act to make an assessment. Moreover, the question posed to the Special Bench of the Settlement Commission in Rescuewear (supra) was not the issue arising here viz. Whether an assessment proceeding can be said to be pending even when the period to make an assessment has expired under Section 153 of the Act? Therefore, the above decision of the Special Bench in Rescuewear (supra) is of no assistance to the petitioner. 14) We have, independent of the view of the Gujarat High Court in Amrish Kumar Shukla (supra)and Kolkatta High Court decision in the Outotec (supra), on examining the submissions concluded that the application for settlement filed on 7 March 2013 for the assessment year 2007-08 to 2009-10 before the Settlement Commission in the present facts, is not maintainable. However, as the Settlement Commission in the impugned order dated 15 March 2013 relied upon the decision of the Gujarat High Court in Amrish Kumar Shukla (supra) and Kolkatta High Court order in Outotec (supra) and submissions were also made thereon before us, we are examining the same. The issue before Gujarat High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X
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