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Shri Shashikal Palke Versus M/s. Canara Jewellers, Hampanakatta, Mangalore

2016 (8) TMI 1033 - ITAT BANGALORE

Validity of assessment - Settlement Commission u/s 245D(4) - period of limitation - whether the period commencing from the date of order passed by the ITSC u/s 245D i.e. final order to the date of stay granted by the single judge of the Hon’ble Madras High Court should not be excluded while computing period of limitation - Held that:- Where abatement of assessment proceedings u/s 245HA consequent upon admission of application by the Settlement Commission after exclusion of the period under sub-s .....

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98 that means 194 days, thus leaving a period of 171 days. Final order by the Division Bench of the Hon’ble Madras High Court was passed on 16/7/2009 and received by the CIT on 4/8/2009. The assessment was completed on 11/1/2010 i.e. within 160 days from the final order of the Hon’ble Madras High Court. Thus, as against available days of 171 days, the assessment passed is well within the period of limitation. The contention of the assessee is dismissed. - ITA No.670/Bang/2010, ITA No.671/Bang/20 .....

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ce common issue is involved in both appeals, we shall proceed to dispose of the same by this consolidated order. 2. The assessee viz. Yogesh Achar raised the following grounds of appeal: 1. On the facts and in the circumstances of the case the learned CIT(A) erred in passing order in the manner he did. 2. Without Prejudice, the assessment order as framed is bad in law as the same is passed beyond the time limit prescribed under the Act and therefore the same is required to be set aside. 3. The l .....

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the fact that jewelry belonging to other lady member i.e Gayatri Palke to the extent of 65.7 gms were out of her husband earning who is an NRI working in Dubai for which confirmation has also been obtained and given to department. Hence, the CIT(A) accepting the same ought to have deleted the same in Toto. 6. The CIT(A) without giving the opportunity to the appellant to submit the details erred in upholding the addition as made by the assessing officer to the tune of ₹ 20,000/- found durin .....

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e following grounds of appeal: 1. On the facts and in the circumstances of the case the learned CIT(A) erred in passing order in the manner he did. 2. Without Prejudice, the assessment order as framed is bad in law as the same is passed beyond the time limit prescribed under the Act and therefore the same is required to be set aside. 3. The learned CIT(A) erred in confirming the addition to the extent of 5201.75 gms of gold without considering the explanation of the Appellant that Appellant had .....

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e extent of 7290 kg found to be excess by the assessing officer includes individual stock of silver which was brought by the partner and family members from their individual holding . Hence appellant having explained the sources of the same ought to have deleted the same in toto. 6. The learned CIT(A) Further erred in confirming the addition of ₹ 2,90,000/- as diamonds sold outside the books of accounts without accepting the explanation of the appellant that the shortage in the stock of di .....

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rbitrary, excessive and ought to be deleted in toto. 10. For these and such other grounds that may be urged at the time of hearing, the assessee prays that the appellant may be allowed. 3. In the above appeals, the assessees raised the grounds challenging that the assessment orders passed are barred by limitation. Since this ground of appeal goes to the very root of the matter, at the first instance, we shall dispose of the same. 4. Brief facts of the case are as under: A search and seizure oper .....

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y of scrutiny assessment proceedings, the assessee filed application before the Income-tax Settlement Commission [hereinafter referred to as ITSC ] u/s 245C of the Act for the assessment years 1992-93 and 1993-94. The said application came to be admitted by the ITSC u/s 245D(1) on 23/11/1995. Consequently, assessment proceedings were kept in abeyance. Thereafter, the ITSC passed order u/s 245D(4) of the Act on 21/05/1998. The assessee filed writ petition before the Hon ble High Court of Madras a .....

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f the learned Single Judge. Finally, the Hon ble Madras High Court, vide its order dated 16/07/2009 had set aside both the order of the ITSC dated 21/5/1998 as well as the order of the learned Single Judge dated 28/2/2001 by observing that this order of the judgment of the Hon ble High Court shall not stand in the way of the AO or the competent authority to proceed in accordance with law, if otherwise, it was not barred by limitation. 5. Subsequently, the AO issued fresh notices and revived the .....

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d that the assessee has raised an objection that the assessment is barred by limitation for the A.Y. 1993-94 in the case of M/s Canara Jewellers. For the sake of clarity, it is hereby stated that the assessment in this case is being completed well before the time barring date. The same is analyzed as under: a. The exclusion of the period mentioned in explanation 1(v) to section 153 reads as under: In computing the period of limitation for the purposes of this section - in a case 'where an ap .....

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e CIT on 26/12/1995. The duration involved is 97 days. This period is clearly excludible under this clause. The Hon'ble High Court of Madras has also specifically referred this clause while passing the order on 16/07/2009 in the assessees case in the Writ Appeal No. 970 and 971 of 2001. b. Section 245F(2) of the acts reads as under: "Where an application made under section 245C has been allowed to be proceeded with under section 245D, the Settlement Commission shall, until an order is p .....

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5D(4) has been passed on 21/05/1998. Therefore, as per this provision the settlement commission had the exclusive jurisdiction for the period between 20/09/1995 and 21/05/1998 i.e. for 974 days. It may be noted that this period is 'mnc1uiv'of period covered separately u/s 153, explanation 1(v) as discussed in earlier paragraph. Therefore, even if the assessee's contention, that exclusion u/s Explanation 1(v) is not applicable as the Settlement application has been allowed to be proce .....

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ing the whole or any part of the proceeding or giving an opportunity to the assessee to be reheard under the proviso to section 129, or (ii) the period during which the assessment proceeding is stayed by an order or injunction of any court- shall be excluded" In the present case, the sett lement Commission has passed the order on 21/05/1998. The order of the Settlement Commission was challenged by the assessee in Writ Petition No. 12315 of 1998 before the Hon'ble Madras High Court The H .....

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d 8604 of 2001. Finally the Hon ble High Court in their order dated 16/07/2009 set aside the order dated 21/05/1998 passed by the Settlement Commission and the order dated 28/02/2001 passed by the learned single judge. Therefore, the assessment proceedings could be revived only after the order of Hon'ble ,Madras High Court dated 16/07/2009 received in this office on 04/08/2009. Therefore, the entire period between 21/05/1998 to 04/08/2009 i.e. 4093 days are excludible under the clause (i) an .....

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period of 5,067 days as calculated above is excluded then the time is available till 12/02/2010 for completing the assessment u/s 143(3). Therefore, the present assessment order is within time. 6. Being aggrieved an appeal was filed before the CIT(A) who held that the order of assessment passed was well within the period of limitation vide paras.15 to 17 of his order: 15. I have carefully considered the facts of the case and the rival submissions. To address at the outset the issue of validity o .....

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itted by ITSC, the latter had exclusive jurisdiction over the case under the provisions of section 245F(2), which barred any other authority from exercising jurisdiction over the case during the pendency of such application. Even after disposal of the application by ITSC, it was the appellant who had carried the matter further to the Hon'ble High Court of Madras. Had he not done so and accepted the ITSC's verdict, there would be no scope for the assessing officer to revive the impugned a .....

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re not excludible, then the Hon'ble High Court's observation would be rendered meaningless. The Hon'ble High Court has also noted in its order the provision of section 153(3)(v), implying that the assessment proceeding could be presumed by the assessing officer under that provision. The assessing officer has correctly elucidated in great detail the provisions relating to the periods excludible under section 153. I strongly agree with his analysis that the assessment proceeding would .....

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er, and that this period of 191 days was to be set off against the period available from 2 1.09.1995 to 31.03.1996. It must be borne in mind that, in the absence of the stay petition moved by the appellant, no further proceeding before any forum would take place, since the ITSC's order under section 145D(4) would become final. In such eventuality, the assessing officer would have neither the occasion nor the need to revive the assessment proceeding. Hence the question of the period of limita .....

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urt would not count as an excludible period. This argument is completely devoid of merit and deserves to be rejected. 7. Being aggrieved, the assessee is before us in the present appeal. Learned counsel for assessee has demonstrated before us that the order of assessment should have been passed on or before 8/3/2009 by following the following chart: 8. In short, it is the contention of the assessee that the period commencing from the date of order passed by the ITSC u/s 245D i.e. final order to .....

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