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TMI Blog2024 (3) TMI 958X X X X Extracts X X X X X X X X Extracts X X X X ..... under the textual exceptions of fraud or misrepresentation. In the instant case, the application of the petitioner was accepted and the proceedings were initiated therein by the ITSC after the second search and seizure operation was conducted by the respondent on 05.03.2013. Thus, undoubtedly, since the ITSC was already held up with the concerned AY, including the aspects raised by the respondent in the present petition, the AO cannot be allowed to exercise jurisdiction to reopen the proceedings under the guise of Section 147/148 of the Act for the relevant AY in consideration. As already settled allowing the AO to proceed with the impugned notices and order for reopening assessment for the concerned AY would create a situation of downright chaos and vagueness. Put otherwise, it would tantamount to simultaneous existence of two concomitant and materially different assessment orders for the same AY, which is completely impermissible as per the provisions of the Act. The issue regarding the impermissibility of two assessment orders for a particular AY was also highlighted in the case of Abhisar Buildwell Pvt. [ 2023 (4) TMI 1056 - SUPREME COURT] Therefore, if the respondent was appre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SHWANT VARMA AND HON BLE MR. JUSTICE PURUSHAINDRA KUMARKAURAV For the Petitioner Through: Mr. Sameer Rohatgi, Mr. Akshit Pradhan Mr. Kartikey Singh, Advocates. For the Respondent Through: Mr. Abhishek Maratha, SSC with Ms. Nupur Sharma Mr. Parth Semwal, Advocates. JUDGMENT PURUSHAINDRA KUMAR KAURAV, J. 1. The present writ petition has been filed by the assessee under Article 226 and 227 of the Constitution of India against the impugned order dated 30.11.2023 passed by the respondent under Section 148A(d) of the Income Tax Act, 1961 [ Act ] for the Assessment Year [ AY ] 2007-08. The petitioner also prays for quashing of the corrigendum and notice dated 30.11.2023 issued by the respondent under Section 148 of the Act. In the factual backdrop of this case, this petition involves determination of the scope of interference in the order of Income Tax Settlement Commission [ ITSC ] in light of the interplay between Section 245-I and Section 150 of the Act. 2. The facts necessary for adjudication of the present case would reveal that on 31.10.2007, the petitioner filed its Income Tax Return [ ITR ], declaring the income to the tune of Rs. 12,41,50,220/- for the concerned AY. It was follow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by this Court on 05.09.2017. 8. The order of this Court dated 27.02.2017 was challenged before the Hon ble Supreme Court by way of a Special Leave Petition being SLP (C) No. 29496 of 2017, whereby, the matter was tagged with a batch of similar pending matters. The said batch of matters was subsequently decided vide judgment in the case of CIT v. Abhisar Buildwell P. Ltd. [2023 SCC OnLine SC 481]. 9. Thereafter, in the light of the judgment passed in Abhisar Buildwell P. Ltd. (supra) and consequent instructions issued by the Central Board of Direct Taxes [ CBDT ], the respondent-initiated proceedings against the petitioner vide issuance of notice dated 29.09.2023 under Section 148A(b) of the Act. While rejecting the reply dated 23.10.2023 submitted by the petitioner to the said notice, the respondent passed the impugned order dated 30.11.2023 under Section 148A(d) of the Act. Contemporaneously, upon approval being accorded to the respondent by the prescribed authority, it also issued the impugned notice under Section 148 of the Act and the corrigendum thereto, both dated 30.11.2023. The respondent has also relied upon Section 150(1) of the Act to issue the impugned notice. 10. It i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and bad in the eyes of law. 14. Per contra, learned counsel appearing on behalf of the respondent vehemently opposed the submissions advanced by the learned counsel for the petitioner to submit that the reassessment proceedings are carried out in accordance with the provisions of the Act itself and the same cannot be termed as being illegal or void. 15. Learned counsel submitted that the issues involved in the case at hand was never put forth before the ITSC and therefore, the ITSC did not have an occasion to consider the income which is stated to have escaped assessment. He also submitted that in the absence of requisite consideration by the ITSC to the issues in question, the order of the ITSC qua the said issues could neither be said to have attained finality nor held to be conclusive in respect of matters for which the assessment is sought to be reopened. He, therefore, contended that there is no cogent reason to proscribe the respondent from proceeding with the reopening of the assessment of the petitioner with regard to the issues in question for the concerned AY. 16. We have heard the learned counsels appearing on behalf of the parties and perused the record. 17. The limite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esaid order of the ITSC vide W.P. (C) No. 7836/2017 reads as under:- 2. The challenge in this petition by Revenue is to an order dated 16th September, 2016 passed by the Income Tax Settlement Commission ('ITSC') to the extent of (i) granting immunity from penalty and prosecution under Section 245H of the Income Tax Act, 1961 ('the Act') and (ii) granting waiver of interest under Section 234A of the Act to the Respondent No. 1. 3. As regards the first issue, it is submitted that in terms of the provisions of Section 245H of the Act, no immunity from penalty and prosecution can be granted by the ITSC since the complaint under Section 200 Cr.P.C. for offences punishable under Section 276 CC of the Act, was instituted before the receipt of the application under Section 245C. 4. It is clarified by Mr. Sameer Rohatgi, learned counsel for the Respondent No. 1 that in fact, the Respondent No. 1 never sought any immunity from prosecution. He pointed out that the said complaint by the Income Tax Department against the Respondent No. 1 is still pending. 5. In view of that matter, the question of granting Respondent No. 1 immunity from penalty and prosecution under Section 245H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e application and any other matter relating to the case not covered by the application, but referred to in the report of the [Principal Commissioner or Commissioner]. 23. The Hon ble Supreme Court in the case of Brij Lal v. CIT [(2011) 1 SCC 1], while striking a distinction between the assessment in law and the assessment by way of settlement, has discussed the scope of the order passed under Section 254D(4) of the Act. The Court drew an equivalence between the computation of total income as per the self-contained code contemplated under Chapter XIX-A of the Act for the purpose of settlement and assessment, as they both tend to operate exclusively but for fulfilment of the same objective. The relevant paragraphs of the said decision read as under:- 23. Descriptively, it can be stated that assessment in law is different from assessment by way of settlement. If one reads Section 245-D(6) with Section 245-I, it becomes clear that every order of settlement passed under Section 245-D(4) shall be final and conclusive as to the matters contained therein and that the same shall not be reopened except in the case of fraud and misrepresentation. Under Section 245-F(1), in addition to the pow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roach the ITSC with regard to settlement of its claim for deduction under section 80-IB(10) of the Act and there was no adjudication of the said claim in the order of the ITSC. It is, therefore, submitted that the issue relating to deduction under section 80-IB(10) is not a matter covered by the order of the ITSC, and can be reopened by the Assessing Officer. 13. We are afraid that the submission of the Revenue overlooks the fact that in the return the assessee had claimed deduction of Rs. 78,99,00,509 under section 80-IB(10) and it was only after claiming such deduction that the net taxable income was declared at Rs. 89,20,76,630. The Assessing Officer issued notices under section 143(2) and section 142(1) on July 12, 2007, but even before the questionnaire was issued the petitioner had approached the Settlement Commission by an application filed on May 31, 2007. Under section 245F(1), the ITSC, in addition to the powers conferred on it under Chapter XIX-A, shall have all the powers which are vested in an income-tax authority under the Act. By virtue of the provisions of section 245F(2) once the application for settlement was filed and an order was passed allowing the application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Deputy CIT [2014 SCC OnLine Del 2649], wherein, it was held as under:- 14. A facial consideration of the above provisions would reveal that the finality which attaches itself to the Settlement Commission's order is in respect of the matters referred to it. The Revenue's contention appears to be that the non-disclosure of materials which have a bearing on assessment year 2006-07, discovered or seized in search proceedings concerning Shri Modi, were not the subject matter of the Commission's deliberations and, consequently, the subject matter of its order. Attractive though this aspect appears to be, the ruling in Omaxe (supra) precludes the exercise of authority by the Revenue. Whilst from the Revenue's perspective, every nondisclosure or a fresh discovery of facts which might have a bearing on the assessee's returns, prima facie, stands excluded from what is referred to a Settlement Commission, the fallacy in that argument is the Commission has a full weight and the jurisdiction of all the authorities under the Income-tax Act when it is seized of a matter. Concededly in this case, the subject matter before the Commission was the submission of the assessee to it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 (SC) ; Jyotendrasinhji v. S. I. Tripathi (1993) 201 ITR 611 (SC) ; Shriyans Prasad Jain v. ITO (1993) 204 ITR 616 (SC) and Kuldeep Industrial Corporation v. ITO (1997) 223 ITR 840 (SC) are equally conclusive about the plenitude of the powers conferred upon the Settlement Commission. 26. The High Court of Gujarat in the case of Komalkant Faikirchand Sharma v. Deputy CIT [2019 SCC OnLine Guj 6963], while relying upon the decisions in the cases of Brij Lal (supra) and Omaxe Ltd. v. Asst. CIT (supra), has held that the AO does not have any jurisdiction to reopen the assessment when an order under section 245D(4) of the Act in relation to the AY in respect of which the assessment is sought to be reopened has already been passed by the ITSC. The relevant paragraphs of the said decision are reproduced as under:- 7.10 The upshot of the above discussion is that once an order has been made by the Settlement Commission under section 245D(4) of the Act, the same is conclusive and final in respect of the assessment for the assessment year in relation to which such order was passed and the Assessing Officer has no jurisdiction under section 147 of the Act to reopen an assessment made under sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commission may erode the confidence of the bona fide assessees, thereby leading to multiplicity of litigation where settlement is possible. This larger picture has to be borne in mind. 28. Thus, considering the foregoing discussion, it is seen that the order of the ITSC is deemed to be conclusive for all the matters pertaining the concerned AY for which the settlement application has been accepted and processed by the ITSC. In case, the Income Tax Department is not satisfied with the computation of income by the ITSC for the relevant AY, the same could only be assailed in accordance with the provisions contemplated under Section 245D(6) read with Section 245D(7) of the Act. The legislative scheme envisaged for ITSC is self-contained in nature and the intent appears to be to facilitate a mutually satisfactory arrangement which could not be reopened, unless explicitly covered under the textual exceptions of fraud or misrepresentation. 29. In the instant case, the application of the petitioner was accepted and the proceedings were initiated therein by the ITSC after the second search and seizure operation was conducted by the respondent on 05.03.2013. Thus, undoubtedly, since the ITSC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 153-A would be redundant and/or re-writing the said provisions, which is not permissible under the law. [Emphasis supplied] 31. Therefore, if the respondent was apprehensive of the fact that the petitioner had suppressed its income before the ITSC, it ought to have resorted to the remedy contained in Chapter XIX-A of the Act itself on the grounds of fraud or misrepresentation. The concept of fraud has been jurisprudentially recognized as a concept of wide import, and thus, availability of a challenge on the ground of fraud could have provided an effective remedy to the respondent, if so justified. Evidently, the respondent has failed to seek recourse to such a remedy and rather, preferred an appeal before this Court on altogether different aspects as compared to the ones raised in the present petition. In any case, the same was also dismissed vide order dated 05.09.2017. 32. Further, the respondent has strenuously relied upon sub-Section (1) to Section 150 of the Act in juxtaposition with the decision in Abhisar Buildwell P. Ltd. (supra), to contend that the same confers an authority on the respondent to issue the impugned notices and reopen the completed assessments under Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 147/148 of the Act, subject to fulfilment of the conditions as envisaged/mentioned under sections 147/148 of the Act and those powers are saved. [Emphasis supplied] 34. A plain reading of the aforesaid extract of the judgment does not lead us to satisfactorily concur with the contention raised by the respondent, that the said paragraph be construed as a direction for reopening the assessment under Section 147/148 of the Act in the case at hand. Even otherwise, the prayer with respect to reopening the assessment taking recourse to Section 150 of the Act akin to the instant case, was sought by the Revenue in a Miscellaneous Application titled as PCIT v. Abhisar Buildwell P. Ltd. [2023 SCC OnLine SC 618] in the case of Abhisar Buildwell P. Ltd. (supra). The Hon ble Supreme Court refused to entertain the said clarification application qua the prayers sought therein and held as under:- 1. Present Miscellaneous Application has been preferred by the Revenue seeking following prayers: (a) This Hon'ble Court may clarify that the waiver of limitation as stipulated in section 150(2) is to be read in respect of the date of issue of notice for reassessment under section 148 (i.e.) if as on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation be decided and disposed of in accordance with law and on its own merits. 5. With this present application stands disposed of. [Emphasis supplied] 35. Thus, so far as the decision relied upon by the respondent in the case of Abhisar Buildwell P. Ltd. (supra) is concerned, in the given facts and circumstances, the same cannot be construed to be an authority to override the mandate of Section 245-I of the Act. Sections 150 and 245-I of the Act are provisions of equal standing and a conflict between the two must be resolved by resorting to the principle of harmonious construction. One of the foremost considerations of harmonious construction is to preserve the essence and meaning of both the provisions, and to not let either provision fall at the expense of the other. If the settlement arrived at by ITSC is allowed to be reopened on grounds, other than those expressly provided for, it would effectively render the entire mandate of the ITSC as vulnerable and the commitment of the finality of a settlement would stand compromised. It is this legislative sanctity of ITSC that provides it a special status under the Act. Since the decision of the ITSC qua the issues in the present peti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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