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TMI Blog2014 (11) TMI 437X X X X Extracts X X X X X X X X Extracts X X X X ..... uphold the completion of block assessment and determination of un-disclosed income for various years at Rs. 27,73,230/-." 2. The Ld. counsel for the assessee, Mr. Ashwani Kumar, CA argued at the outset to decide ground No.1 with regard to the assessment being time barred and accordingly, he proceeded to argue the issue with regard to ground No.1. The Ld. counsel for the assessee, Mr. Ashwani Kumar argued that the brief facts of the case are that the assessee is the proprietor of the Petrol Pump and there was no search and seizure operations on the applicant but the search was made on the premises of Sh. Raj Kumar Accountant and as per para-14 of the order, some documents pertaining to the assessee were seized and on the basis of that the proceedings u/s 158BD were initiated against the assessee. As per para 3 of the order, the assessee filed an application before the Settlement Commission on 07.06.2002 for the block period and for regular assessment for A.Y. 2001-02 and the Settlement Commission passed the order u/s 245D(1) and that application was allowed to be proceeded with and thereafter, since the assessee did not pay the admitted tax, the proceedings in this case abated on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one of the cases, the specified date had been laid down in the explanation to Section 245HA which reads as under: "Explanation - For the purposes of this sub-section, "specified date" means - (a) in respect of an application referred to in clause (i), the day on which the application was rejected; (b) in respect of an application referred to in clause (ii), the 31st day of July, 2007; (c) in respect of an application referred to in clause (iii), the last day of the month in which the application was declared invalid; (d) in respect of an application referred to in clause (iv), on the date on which the time or period specified in sub-section (4A) of section 245D expires. 2.2. He further stated the above two sections are required to be examined vis-à-vis the grounds as taken by the assessee that assessment as framed by the AO is barred by time. The amended section 245D(2D) made it obligatory for the applicant to pay the additional tax on the income disclosed in the settlement application on or before 31st of July, 2007, so that the application could be proceeded further for final adjudication. However, at the time when the payment of tax was to be made, due to change of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 186, the period aforesaid shall, likewise, be excluded." 2.3. The Ld. counsel for the assessee invited our attention to 2nd proviso to section 153(4) as amended by the Finance Act, 2008 w.e.f. 01.06.2007 which reads as under: "Provided further that where a proceeding before the Settlement Commission abates under section 245HA, the period of limitation available under this section to the Assessing Officer for making an order of assessment, reassessment or re-computation, as the case may be, shall, after the exclusion of the period under sub-section (4) of section 245HA, be not less than one year; and where such period of limitation is less than one year, it shall be deemed to have been extended to one year; and for the purposes of determining the period of limitation under sections 149, 153B, 154, 155, 158BE and 231 and for the purposes of payment of interest under section 243 or section 244 or, as the case may be, section 244A, this proviso shall also apply accordingly." He further stated that by going through this proviso, the A.O. was legally bound to complete the pending assessment after 31st of July, 2007 but before 31st of July, 2008. The A.O. having failed to compl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts and circumstances, any subsequent issuance of notices u/s 143(2) by the A.O. are clearly barred by time. 3. The Ld. DR, Mr. Tarsem L:al, on the other hand, relied upon the order of the CIT(A) and the remand report of the A.O. available at pages 3 & 4 of the order of the ld. CIT(A). The relevant para of the said remand report is reproduced for the sake of convenience, as under: "a) The assessee filed an application u/s 245C of the I.T.Act before Hon'ble Settlement Commission (Application No.9/35/2002/1-IT on 07.06.2002 for the Block period 01.04.90 to 29.11.2000 and regular assessment for A.Y. 2001-02. The Hon'ble Settlement Commission passed an order u/s 245D(1) of the I.T.Act, 1961 and allowed the applicaton of the assessee to be proceeded with. Later on the provisions of section 245D were amended w.e.f. 01.06.2007 and subsection (2D) was inserted which reads as under: "Where an application was made under sub-section (1) of section 245C before the 1st day of June, 2007 and an order under the provisions of sub-section (1) of this section, as they stood immediately before their amendment by the Finance Act, 2007, allowing the application to have been proceeded with, has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereinabove. The application under section 245C(1) has been made before Ist day of June, 2007 and the application was allowed to have been proceeded with, before the Ist day of June, 2007 and no order under sub-section (4) was passed before the Ist day of June, 2007 and as per provisions of section 245D(2D), such application shall not be allowed to be further proceeded with unless the additional tax on the income disclosed in such application and the interest thereon is paid on or before the 31st day of July, 2007. There is no dispute to the fact that no tax has been paid on or before 31st day of July, 2007 and therefore, the application was not to be allowed to be further proceeded with and therefore, whether the proceedings before the Settlement Commission have been abated in view of section 245HA(1)(ii) read with explanation (b) on 31st day of July, 2007. Whether the application before the Settlement Commission becomes redundant in such circumstances on 31st July, 2007 being the specified date. As per the Ld. counsel for the assessee unless Settlement Commission can proceed with, the application under section 245D(2D) after 31st July, 2007 cannot be adjudicated and there is no o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an application referred to in section 245D(2D) as in the present case and the section referred to and relied upon by Ld. counsel for the assessee. The passing of the order u/s 245D(4) read with section 245D(4A)(i) is mandatory on the Settlement Commission since statute has used the word 'shall' in section 245D(4A). ii) In such cases, the abatement of the proceedings before settlement commission are covered u/s 245HA(1)iv) read with explanation (d), according to which the abatement of the proceedings should be 31.03.2008 as referred in section 245D(4A)(i) read with section 245D (4) and the AO is required to pass the order by 31.03.2009, which in fact has been passed on 31.03.2009. 5.4. Now we peruse the case of assessee, as already discussed in paras hereinabove, that such appreciations before the Settlement Commission shall not be allowed to be proceeded with unless the additional tax on the income disclosed in such application and the interest thereon is not paid on or before 31st day of July, 2007. In the present case, taxes and interest thereon have not been paid on or before 31st day of July, 2007. In such cases, the abatement of proceedings before settlement commission is co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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