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TMI Blog2008 (6) TMI 581X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act, the Chairman of Commission was requested to constitute a Special Bench consisting of five Members to hear the settlement application and decide the issues involved. Consequently, by his order under section 245BA(5A) of the Act, the Chairman constituted a Special Bench consisting of five Members of the Commission to hear the settlement application on 13-6-2008 at 11 a.m. in Kolkata. The issues to be determined by the Special Bench have been identified in the said order as under : (i)For the years for which returns have been filed but have neither been processed under section 143(1) of the Act nor notices have been issued under section 143(2) of the Act, whether proceedings for the assessment are pending or not ? (ii)For the years for which returns have been processed under section 143(1) of the Act but now no time is left for issue of notices under section 143(2) of the Act, whether proceedings for the assessment years are pending or not ? (iii)The meaning of date of conclusion of proceeding under clause (iv) of sub-section (b) of section 245A of the Act; (iv)If in this composite application for five years, proceedings for certain assessment years are pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had not yet been called upon to enter his defence. 4.1 The learned CIT-Departmental Representative, further stated that in the present case no notice has been issued by the Assessing Officer under sections 143(2) and 142(1) though the return of income has been processed under section 143(1). Admittedly the limitation for issue of notice under section 143(2) has already lapsed for some of the assessment years. Therefore, according to him, since no proceedings can be taken in the case for assessment under section 143(3)/144 in those years, the assessment proceedings cannot be said to be pending at least for those years. 4.2 The learned CIT-Departmental Representative, further, argued that applying the above definition of word pending , as provided in Stroud s Dictionary and also applying the test, as laid down by Hon ble Jessel M.R. in Clagett s; Fordham s case (supra), which has been approved by the Hon ble Supreme Court in the case of Asgar Ali Nazarali Singaporewalla (supra), referred to in the earlier para, it can be emphatically stated that in this case in the assessment years in which limitation period for issue of notice under section 143(2) has already expired, no pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis assumption underlying the statutory provision [K.P. Varghese v. ITO [1981] 131 ITR 5975 (SC)]. 4.3 The learned CIT-Departmental Representative further referred to various case laws as under : (i) Devidas v. Union of India [1993] 200 ITR 697 , 703 (Bom.) (It is well-settled that when from construction of a statute two views are possible, one which results in anomaly and other not, it is the duty of the Court to adopt the latter and not the former.) (ii) C.W.S. (India) Ltd. v. CIT [1994] 208 ITR 6496 (SC) (Where a literal interpretation leads to absurd or unintended result, the language of the statute can be modified to accord with the intention of Parliament and to avoid absurdity.) (iii) Sachida Nand Singh v. State of Bihar [1998] 2 SCC 493. (It is a settled proposition that if the language of a legislation is capable of more than one interpretation, the one which is capable of causing mischievous consequences should be averted). 4.4 The learned CIT-Departmental Representative, further argued that the issues before the Hon ble Settlement Commission have been squarely covered by the decisions of the Hon ble Settlement Commission, Addl. Bench, Mumbai in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 ITR 198 (SC) wherein the Hon ble Supreme Court held that even if a circular is inconsistent with law the same has to be followed. The Hon ble Supreme Court in the case of UCO Bank v. CIT [1999] 237 ITR 8891 (SC), (on pp. 897-898) has observed that circulars of the CBDT are legally binding on the revenue and this binding character attaches to the circulars even if they be found to be not in accordance with the correct interpretation of the section and they depart or deviate from such construction. 5.2 The learned Authorised Representative, further observed that the ITSC, Addl. Bench, Mumbai, while delivering the decisions in the case of Shagun Enterprises ( supra) and Dr. Pradeep Talwalkar (supra) did not have benefit of this circular as it was issued on 12-3-2008 whereas the orders in these cases were passed on 10-1-2008. The learned Authorised Representative, further stated that if the judgment delivered by the Addl. Bench of ITSC, Mumbai does not propound correct position of law, the present Bench, being a Larger Bench, is not bound to follow the same. He, further, argued that there is no inherent contradiction between the main clause (b) of section 245A and clause (iv) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n this connection he referred to the decisions of the Supreme Court in the cases of CIT v. Kasturi Sons Ltd. [1999] 237 ITR 241 and Federation of Andhra Pradesh Chambers of Commerce Industry v. State of Andhra Pradesh [2001] 247 ITR 362. The learned counsel further stated that there was no contradiction between the main section 245A(b) and clause (iv) of the Explanation. According to him, the Explanation to the main clause makes clear the meaning of case pending before the Assessing Officer. This clause clearly states that proceeding for assessment for any assessment year shall be deemed to have commenced from the first day of the assessment year and shall conclude on the date on which the assessment is made. In this context Mr. Wadhwa, further argued that in a case where assessment has not been made, it can be stated that the proceedings are still pending though the Assessing Officer may be barred by limitation from issue of notice under section 148 read with section 147. According to the learned counsel, such limitation means non-availability of remedy in the hands of the Assessing Officer but the liability on the part of assessee does not cease. He, therefore, emphas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri S.R. Wadhwa and Shri S. Bandyopadhyay, advocates and interveners dealt with, at length, on various issues raised in this case. We have also gone through the various case laws cited by both the sides. The issues which have been referred to before the Special Bench are answered in the context of the facts and circumstances of the present case as under : (i) First issue : Yes, pending. (ii) Second issue : Yes, pending in view of the CBDT circular explaining the provisions, referred to above and discussions in respect of the third issue below. (iii) Third issue : As per the provisions of section 245A(b) pendency of proceedings for assessment before the Assessing Officer for one or more assessment years is a necessary condition for invoking the jurisdiction of the Commission in respect of a settlement application. Clause (iv) of the Explanation to the said section clearly states that a proceeding for assessment shall be deemed to have commenced on the first day of the assessment year and concluded on the date on which assessment is made. Before us, on the one hand, it has been argued that the literal and strict interpretation of the relevant provisions will clearly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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