9911796707
TMI Blog2014 (11) TMI 437X X X X Extracts X X X X X X X X Extracts X X X X ..... which have been abated once, which is the case of assessee i.e. on 31st day of July, 2007 cannot again abate on a later date i.e. on 31.03.2008 which is the case of revenue - The Act is silent on such a situation – thus, the interpretation which favours the assessee, has to be adopted and accordingly the proceedings before the Settlement Commission get abated on 31.03.2007 and the proceedings before the AO get revived on 01.08.2007 – thus, the AO was required to pass the assessment order by 31.07.2008, which in fact has been passed on 31.03.2009 and therefore, the assessment by the AO for the block period is barred by limitation - the assessment so made is bad in law and the order of CIT(A) is reversed – Decided in favour of assessee. - IT(SS) A.No.01(Asr)/201, Block Period: 01.04.1990 to 29.11.2000 - - - Dated:- 30-7-2014 - SH. A.D. JAIN AND SH. B.P.JAIN, JJ. For The Appellant :Sh. Ashwani Kumar, CA For The Respondent : Sh. Tarsem Lal, DR ORDER PER B.P.JAIN, AM ; This appeal of the assessee arises from the order of the CIT(A)-1, Ludhiana dated 01/07/2011 for the block period 01.04.1990 to 29.11.2000. The assessee has raised following grounds of appeal: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , as they stood immediately before their amendment by the Finance Act, 2007, was not passed before the 1st day of June, 2007, such application shall not be allowed to be further proceeded with unless the additional tax on the income disclosed in such application and the interest thereon, is, notwithstanding any extension of time already granted by the Settlement Commission, paid on or before the 31st day of July, 2007. He further stated that alongwith it, an explanation had also been inserted therein which reads as under: Explanation In respect of the applications referred to in this subsection, the 31st day of July, 2007 shall be deemed to be the date of the order of rejection or allowing the application to be proceeded with under sub-section (1). He further stated that section 245HA was also inserted w.e.f. 1.6.2007 which is also reproduced as under: Abatement of proceeding before Settlement Commission. 245HA. (1) Where (i) an application made under section 245C on or after the 1st day of June, 2007 has been rejected under sub-section (1) of section 245D; or (ii) an application made under section 245C has not been allowed to be proceeded with under sub- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Settlement Commission has not been made, then the application of the assessee stood abated on 31st July, 2007 and no further order was required to be passed by the Settlement Commission and the use of word shall and defining of specified date for the purposes of adjudication makes the thing absolutely clear and leaves no ambiguity. These are statutory provisions and there cannot be any extension of the date in view of the statutory provisions which have been laid down in the Act. The provisions of the statute are very clear and there is no ambiguity about the same and the use of word shall in 245(2D) read with explanation to section 245D(2A), which lays down that w.e.f. 31st of July, 2007, it shall be deemed the date of order of rejection or allowing the application to be proceeded with and also explanation to section 245HA, where the specified date has been defined with reference to each eventuality leave, no room for doubt at all that the present assessment as framed is barred by time and deserves to be quashed. Clause (2), (3) and (4) of explanation to Section 245HA lays down the procedure for completion of assessment within the stipulated time and clause (4) of explana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s specified by the statute itself and leaves no doubt about the same. Once the proceedings before the Income Tax Settlement Commission had abated on 31.7.2007, it was legally not expected to pass any further order after 31.7.2007 since by the operation of the statute itself the case got abated on 31st July, 2007 and as such order by the AO had to be passed on or before 31st July, 2008. This is more so because the A.O. is not competent and not legally permitted to change the specified time of 31st of July, 2007 to any other date. Thus, the order as passed by the A.O. is null, void and void abinitio because after the case got abated by the express statutory provisions and consequently the time limitation have also been specified as per 2nd proviso to section 153(4) as amended by the Finance Act, 2008 w.e.f. 01.06.2007 and therefore, the assessment as framed by the AO is barred by time. Even otherwise, by virtue of amendment w.e.f. 1.6.2007, with particular reference to section 245D(2D, it made obligatory upon the petitioner to pay the additional tax on the income disclosed before the Settlement Commission on or before 31st of July, 2008 so that the application could be proceeded furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was also inserted w.e.f. 01.06.,2007 which reads as under: i) in respect of an application referred to in sub-section (2A) or sub-section (2D), on or before the 31st day of March, 2008. ii) In respect of an application made on or after the Ist day of June, 2007, within twelve months from the end of the month in which the application was made. In view of these provisions as no order of the Hon ble Settlement Commission was received, the proceedings in this case abated on 31.03.2008 as per provisions of section 245HA(iv) inserted by Finance Act, 2007 read with explanation (d) thereto w.e.f. 01.06.2007. Accordingly, assessment was completed in this case on 31.03.2009. 4. The Ld. CIT(A) vide para 6 of his order dismissed the grounds of the assessee on the issue and the relevant order of the ld. CIT(A) in para 6 is reproduced for the sake of convenience as under: 6. I have considered the issue raised by the appellant and the comments of the A.O. on the same, it is clear that the facts of the case under consideration fall under sub-section 245HA(1)(iv) as the case of the appellant had been duly admitted by the Hon ble Settlement Commission but no order u/s 245D(iv) could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Tarsem Lal argued that even no taxes have been paid, Settlement Commission is required to pass an order u/s 245D(4) read with sec.245D(4A)(i) of the Act i.e. before 31st March, 2008 and provisions of section 245HA(I)(iv) shall be applicable which specifically speaks where no order under section 245D(4) has been passed within time or period specified under section 245D(4A) then Explanation (d) to section 245HA(1) read with section 245D(4A) shall apply where the Settlement Commission is required to pass the order by 31st day of March 2008 and it is only on 31st March, 2008 the proceedings before the Settlement Commission can abate when no taxes having been paid or no order having been passed by the Settlement Commission and the assessment proceedings are revived w.e.f. 01.04.2008 only and not before that i.e. 31.07.2007 as argued by the Ld. Counsel for the assessee. He further argued how could AO assume jurisdiction unless he knows the status of the taxes paid. He also argued that the provisions of section 245D(2A) and explanation are on different domain, rather section speaks of abatement in such a case on 31st March, 2008 of the proceedings before the Settlement Commission. Accor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 245D(4) read with section 245(4A)(i). Also the proceedings which have been abated once, which is the case of assessee i.e. on 31st day of July, 2007 cannot again abate on a later date i.e. on 31.03.2008 which is the case of revenue. The Act is silent on such a situation. To resolve the controversy, the interpretation which favours the assessee, has to be adopted and accordingly the proceedings in the present case before the Settlement Commission get abated on 31.03.2007 and the proceedings before the AO get revived on 01.08.2007. Therefore, the AO was required to pass the assessment order by 31.07.2008, which in fact has been passed on 31.03.2009 and therefore, the assessment by the AO for the impugned block period is barred by limitation. Therefore, the assessment so made is bad in law and the order of Ld. CIT(A) is reversed on the issue. Therefore, ground No.1 of the assessee is allowed. 6. In view of our decision in favour of the assessee in ground No.1, the issue contained in grounds No. 2, 3 4 on merit are left for academic purposes and are not decided since the legal issue in ground No.1 has been decided in favour of the assessee. Thus, the appeal of the assessee is allo ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
