TMI Blog2016 (7) TMI 319X X X X Extracts X X X X X X X X Extracts X X X X ..... construed that the applications of the assessee have abated on 31.3.2008, i.e. the time limit provided in sub-section-4(A). In our opinion, this is the erroneous construction of provision at the end of the ld.CIT(A). Sub-clause 4(A) is applicable on those applications, where the taxes were paid by an assessee before 31.7.2007. In all these applications, the order ought to be passed by 31.3.2008. A perusal of the provisions extracted (supra), it is clear that in case where taxes were not paid by 31.7.2007, then, the application will be deemed to have been abated on this date. In order to find out whether the assessees have paid taxes before 31st July, 2007 or not, we have directed the ld.counsel to demonstrate this fact. The ld.counsel for the assessee for the applicants before the Settlement Commissioner try to demonstrate the tax liability and the amounts paid by both these assessees. However, we find that both the orders are totally silent on this issue. If we arrive at a conclusion that the taxes were not paid by the assessee before 31.7.2007, then, the application before the Settlement Commissioner would abate on 31st July. But if it is established that tax liability was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 both the assessees have taken preliminary issue, whereby, they have pleaded that the assessment orders were passed after expiry of limitation, therefore, these assessment orders deserve to be quashed in respective cases. Other two appeals, one at the instance of assessee and one at the instance of the Revenue in both the cases relate to proceedings initiated under section 154 and 186(2) of the Income Tax Act. If it is held that the assessment orders were time barred, then both the assessment orders would be quashed. Consequent thereupon, other two appeals would become redundant. Therefore, we first take ITA No.938/Ahd/2010 and 937/Ahd/2010. 2. In the case of Patel Land Corporation, the assessee has filed a list of events. It is pertinent to take note of certain dates and development taken place on these dates. They read as under: 04-8-1987 Return of Income was filed 30-3-1988 Asstt. order was passed against which the assessee filed an appeal before the C.I.T. (Appeal), Surat 11-1-1989 The C.I.T. (Appeal) passed the appellate order and thereby deleted all the additions made to the returned income. Against the said order of C.I.T. (Appeal), the Department had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee fails, then, the application deemed to have been as not proceeded with. The contention of the assessee was that as per sub-clause (4) of section 245HA r.w.s section 245(2D), its application would be deemed to have been abated on 31.7.2007 on account of non-payment of taxes. The AO was required to pass the assessment order within a period of one year from 31.7.2007. This has been contemplated in second proviso to section 153(4) as per clause (4) to section 245HA. The AO had issued a notice in the case of Jashwantilal T. Patel on 6.3.2009. He has passed an assessment order on 31.3.2009, hence, the assessment order is time barred. The AO did not consider this plea of the assessee, and his conclusion met the approval of the ld.CIT(A). 4. Before us, the ld.counsel for the assessee contended that a bare perusal of the clause (2D) with Explanation as well as the provision of section 245(HA) along with its Explanation would indicate that if an application has been proceeded with under section 245(D)(1) then, according to the newly inserted provision, the assessee was required to make payment of taxes along with additional taxes before 31.7.2007. In case the assessee fails, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -section (1). 7. The next provision is section 245(HA). It was also inserted on 1.6.2007 with the Explanation appended to this section. It reads as under: Abatement of proceeding before Settlement Commission. 245HA. (1) Where- (i) an application made under section 245C on or after the 1st day of June, 2007 has been rejected under sub-section (1) of section 245D; or (ii) an application made under section 245C has not been allowed to be proceeded with under sub-section (2A) or further proceeded with under sub-section (2D) of section 245D; or (iii) an application made under section 245C has been declared as invalid under sub-section (2C) of section 245D; or (iv) in respect of any other application made under section 245C, an order under sub-section (4) of section 245D has not been passed within the time or period specified under sub-section (4A) of section 245D, the proceedings before the Settlement Commission shall abate on the specified date .. 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; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Finance Act, 2007. The area of dispute between both the parties relates to very narrow compass. As per Revenue, the Settlement Commission was to pass an order under subsection 4 on or before 31.3.2008. However, since the requisite order was not passed by the ld.Settlement Commission by 31.3.2008, the assessees case was covered under clause (4) of sub-section (1) of section 245(HA) r.w.s Explanation (d). On the other hand, the case of the assessee is that once they failed to make payment of taxes in terms of section (2D), their application would deem to have been abated on 31.7.2007, because, their application would not be allowed to be proceeded with. 10. We have duly considered rival contentions and gone through the record carefully. A bare perusal of the above provisions would indicate that, if the an assessee files an application under section 245C of the Income Tax Act before Settlement Commission, then, as per section 245D(1), the ld.Settlement Commissioner shall, within seven days from the date of receipt of application, issue a notice to the applicant requiring him to explain as to why the application made by him be allowed to be proceeded with. In the present case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed by 31.3.2008. A perusal of the provisions extracted (supra), it is clear that in case where taxes were not paid by 31.7.2007, then, the application will be deemed to have been abated on this date. The order of the ITAT (Amristar) Bench) has also given this interpretation in the case of Gurmeet Singh (supra). 11. In order to find out whether the assessees have paid taxes before 31st July, 2007 or not, we have directed the ld.counsel to demonstrate this fact. The ld.counsel for the assessee for the applicants before the Settlement Commissioner try to demonstrate the tax liability and the amounts paid by both these assessees. However, we find that both the orders are totally silent on this issue. If we arrive at a conclusion that the taxes were not paid by the assessee before 31.7.2007, then, the application before the Settlement Commissioner would abate on 31st July. But if it is established that tax liability was discharged in spite of that no specific order has been passed by the Settlement Commission, the application would be considered as abated on 31.3.2008. This situation would goad us to record a different finding on the limitation. If the applications are abated on 31 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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