TMI Blog2012 (9) TMI 840X X X X Extracts X X X X X X X X Extracts X X X X ..... hout any notice under section 143(2). Even final time limit for passing the orders even if such notices were issued had expired by the time the assessee filed his application for settlement before the Commission. The assessee's application qua these years, therefore, was not maintainable, ought not to have been accepted. Thus, the Settlement Commission erred in holding to the contrary in the impugned order. The impugned order to such an extent is, therefore, set aside - Request of the assessee that the material disclosed along with the settlement application should not be used in the normal assessments, cannot be accepted without full examination of such a request - petition allowed - in favour of revenue. - Special CIVIL APPLICATION No. 859 of 2012 - - - Dated:- 15-9-2012 - AKIL KURESHI And Ms. HARSHA DEVANI, JJ. ORDER Akil Kureshi, J. - Heard the learned counsel for the respective parties for final disposal of the petition. 2. The petitioner - Commissioner of Income Tax has challenged an order dated 09.12.2011 passed by respondent No.1 - Income Tax Settlement Commission, by which the preliminary objection of the petitioner to a settlement application filed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Act shall not be granted by the Settlement Commission. The Department may also be permitted to furnish necessary report in due course u/s. 245D(3) on examination of complete particulars in this regard." 6. The Settlement Commission thereupon proceeded to consider the revenue's preliminary objection to the maintainability of the application for settlement. By the impugned order dated 9.12.2011, the Settlement Commission turned down such preliminary objection, making following observations "5. We have carefully considered the above submissions. We find that the applicant has satisfied the conditions laid down under section 245C, as there was pendency of assessment proceedings in view of the aforementioned judgment, the additional amount of income tax payable on the income disclosed in the application exceeded Rs.10 lacs, due taxes have been paid, and intimation under section 245C(4) to the Assessing Officer has been given by the assessee in Form No.34BA within the stipulated time." 7. The Commission placed heavy reliance on the decision of the Special Bench of the Income Tax Settlement Commission in the case of M/s Rescue Ware Corporation, reported in 217 CTR (ITSC)(SB) 597. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of sub-section (1) thereof which is relevant for our purpose, reads as under: "245C Application for settlement of cases. (1) - An assessee may, at any stage of a case relating to him, make an application in such form and in such manner as may be prescribed, and containing a full and true disclosure of his income which has not been disclosed before the Assessing Officer, the manner in which such income has been derived, the additional amount of income-tax payable on such income and such other particulars as may be prescribed, to the Settlement Commission to have the case settled and any such application shall be disposed of in the manner hereinafter provided :" 11. Since sub-section (1) of section 245C of the Act thus permits an assessee at any stage of a case relating to him to make an application for settlement. Therefore, the term "case" assumes significance for our purpose. Such term is defined in section 245A(b) of the Act, which reads as under: "245A (b) - "case" means any proceeding for assessment under this Act, of any person in respect of any assessment year or assessment years which may be pending before an Assessing Officer on the date on which an application u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... definition contained in section 245A(b) of the Act. However, to contend that till the final order of assessment is passed, whether the revenue takes a particular case in scrutiny or not, the assessment should be deemed to be pending, in our view, would be stretching the language used in the definition, as also providing something which is not stated in the language. Accepting such a contention would lead to strange results. In a given case, if the assessment of an assessee is not taken in scrutiny and the revenue never desired to take the same in scrutiny, for long number of years, the assessee could contend that since no final order of assessment has been passed, his case for assessment can be stated to be pending before the Assessing Officer within the meaning of clause (b) of section 245A of the Act. Surely, the legislature never desired to bring about such anomalous situation. 15. It is true that such legislative changes came to be explained by the CBDT in its circular dated 12.3.2008. While explaining the amendments, it was stated that, "........It is further clarified that (a) since intimation under section 143(1) is not an assessment order, there will be no bar in filing a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer in terms of amended clause (b) of section 245A of the Act simply because such a case was not taken in scrutiny and was accepted under section 143(1) of the Act without passing any order of assessment. In fact, the decision of the Special Bench of the Settlement Commission in the case of M/s Rescue Ware Corporation (supra) also did not stretch the meaning of the term "case" to such an extent. Before the Settlement Commission, the counsel for the assessee also agreed that such pendency cannot be perennial. It was in this background that the Special Bench made the following observations : ".... .... On the other hand, it has also been argued that this interpretation may lead to an absurd situation where proceedings may be deemed to be pending before the AO for certain years although, under the Act, the AO may not be empowered to take any action in respect of those years. In the circumstances, we are more impressed with the view, strongly propounded by the CIT-Departmental Representative and endorsed by Dr. Debiprosad Pal, senior advocate, appearing for the applicant, that proceedings for assessment can be said to be pending for particular assessment years only upto such time t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... final order of assessment under section 143(3) was not passed, would run counter to the statutory amendments made in section 245A(b) of the Act. 20. In the present case, the facts are not in dispute at all. For the assessment years 2005-06 to 2008-09, assessments had become time barred without any notice under section 143(2) of the Act. Even final time limit for passing the orders even if such notices were issued had expired by the time the assessee filed his application for settlement before the Commission. The assessee's application qua these years, therefore, was not maintainable, ought not to have been accepted. In our opinion, the Settlement Commission erred in holding to the contrary in the impugned order. The impugned order to such an extent is, therefore, set aside. 21. Request of the assessee that the material disclosed along with the settlement application should not be used in the normal assessments, cannot be accepted without full examination of such a request. There is no formal prayer made by the respondent on record. In any case, we are not inclined to examine such a request in the petition filed by the revenue. We, therefore, do not pass any order in this respec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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