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2014 (12) TMI 398 - HC - Income TaxNon-compliance of provisions of section 245D(2D)– Order passed by Income Tax Settlement Commission – Abatement of proceedings u/s 245HA (1)(ii) - Whether the Commission was justified in holding that the proceedings before it abate in view of the non-deposit of the amount of additional tax together with interest as directed by it by the order u/s 245D(1) – Held that:- The assessee in the application u/s 245C of the Act, had declared undisclosed income - in Ajmera Housing Corporation & Anr. v. Commissioner of Income Tax [2010 (8) TMI 35 - SUPREME COURT OF INDIA] it has been held that disclosure of "full and true" particulars of undisclosed income and "the manner" in which such income has been derived are the pre-requisites for a valid application u/s 245C(1) - it was not permissible for the assessee to revise the application made by it u/s 245C(1) - it was incumbent upon the petitioner to pay the additional tax in terms of the original application made by him under section 245C of the Act, whereby he had declared the undisclosed income - the Settlement Commission committed no error in holding that the application made by the assessee u/s 245C of the Act stands abated - the Settlement Commission has expressly stated what is implied in law, inasmuch as, the abatement is by virtue of the operation of the provisions of sub-section (1) of section 245HA – thus, the order of the Settlement Commission is upheld – Decided against assessee. Entitlement for alternate relief - Whether the assessee is entitled to the alternate relief prayed for in the petition, namely, for restoration of the appeal filed by it before the Tribunal against the order made by the AO u/s 158BC – Held that:- At the relevant time when the application u/s 254C(1) of the Act came to be made by the assessee, the assessment proceedings u/s 158BC of the Act were pending before the AO – relying upon Commissioner of Income-Tax v. Damani Brothers [2002 (12) TMI 11 - SUPREME Court] wherein it has been held that the scheme of Chapter XIX-A shows that the filing of application by the assessee is a unilateral act and the department may not be aware of the same - the liability under order made by the AO u/s 158BC of the Act would exist even after the Settlement Commission passed the order u/s 245D(1) of the Act - despite the fact that the Commission has observed that the AO shall now dispose of the case in accordance with the provisions of sub-sections (2) (3) and (4) of section 245HA of the Act, the order u/s 158BC of the Act would still subsist as there is no automatic setting aside of such order – thus, in the light of abatement of the proceedings before the Settlement Commission by operation of the provisions of section 245HA of the Act, the interest of justice requires that the appeal preferred by the petitioner before the Tribunal be restored - The assessee is entitled to the alternate relief prayed for in the petition, namely, for restitution of its appeal before the Tribunal – Decided in favour of assessee.
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