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2017 (3) TMI 740 - HC - Income TaxConstitutional validity of provisions of Section 245D(4A) and 245HA - automatic abatement of settlement application if no final order is passed by the Settlement Commission before 31.03.2008 - cause of delay - Held that:- After getting the Principal Bench’s advice on 19.08.2016, earnest attempts were made to reconstruct the files as the matters were very old and records were not readily available with the Principal Bench and thereafter to get comments of both the petitioners and the department. However, the petitioners have delayed sending their comments/counter comments repeatedly. Extension of time for appearance during hearing was also sought, knowing well that the time limit, fixed by Division Bench of this Court was approaching near. Final comments were ultimately furnished by the petitioners on 09.12.2016, just before the limitation date. The department has legitimately sought time to examine the petitioners’ comments and contentions, which cannot be granted in view of the limitation that is expiring on 27.12.2016. The Settlement Commission therefore, squarely blamed the petitioners for the delayed responses and repeated requests for adjournments, which impeded the process of finalization of the matters. However, the Settlement Commission also noted that Pr. CIT has also sought a period of one and a half months to carry out the required verification and observed that this request of the department could not be brushed aside because in view of the principles of natural justice, due opportunity needs to be given to both the parties. Therefore, the Settlement Commission held that even though period of six months fixed by this Court was expiring on 27.12.2016, it was not possible for it to conclude the proceedings by that date and therefore, proceedings in the cases should be taken to have abated. If 27.12.2016, as per computation made by the Settlement Commission, was the date up to which proceedings were to be concluded, there was no occasion for the Settlement Commission to declare the proceedings to have abated one week before that date, i.e. on 19.12.2016, the date on which impugned order was passed. Besides, the facts as noted hereinabove would show that though the petitioners to some extent were also responsible for the delay caused in completion of the proceedings, but it cannot be said that the petitioners alone were guilty of causing such delay because the department was also contributory in prolonging the proceedings for one reason or the other, particularly when it demanded a period of one and a half months, whereas already a week’s time was left before period of six months fixed by Division Bench of this Court would have expired. Therefore, this Court is of the opinion that ends of justice would be met, if the time to conclude the aforesaid proceedings is extended by further three months from today with direction to the parties to produce copy of this order before the Settlement Commission within a period of one week with clear stipulation that the Settlement Commission shall take up the proceedings, if not possible on day to day basis and if not, then on weekly basis and shall not grant undue adjournment to either of the parties and if adjournment is granted then it should be for a maximum period of seven days at one go and the Settlement Commission shall conclude its proceedings within a period of two months and utilize remaining period of three weeks to finalise and frame its final order. Writ petitions are allowed. The impugned order dated 19.12.2016 is set aside. The matter is remitted back to the Settlement Commission for deciding it afresh in accordance with the aforementioned directions.
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