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Yashovardhan Birla Versus Deputy Commissioner of Income Tax, Central Circle 4 (1) and 3 Ors.

2016 (9) TMI 296 - BOMBAY HIGH COURT

Jurisdiction of the Commission to entertain a settlement application - Held that:- The declaration of law by this Court is binding on all authorities within the State including the Commission. The petitioner was entitled to proceed on the basis that till the service of the assessment order, the case continues to be pending with the Assessing Officer. Therefore, it was open to him to invoke the provisions of Chapter XIXA of the Act on 30th March, 2016 as till that date the assessment order was no .....

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on 12th April, 2016. We find that in the present facts, the petitioner was entitled to act upon the above representation. It is not fair for the State to now take up the stand that on the proper interpretation of the provisions of law, the representation made by it is not in accordance with law. At the very highest, even according to the Revenue, the issue is not clear as it is subject to interpretation, at the very least, therefore, the Commission must be held bound by its representation. As i .....

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for settlement is restored to the file of the Commission at the stage of 245D(1) of the Act. The period of 14 days as provided in Section 245D(1) of the Act, will run from the date this order is first communicated by either of the parties to the Commission. - WRIT PETITION NO. 1208 OF 2016 - Dated:- 3-8-2016 - M.S. SANKLECHA AND A.K. MENON, J.J. For The Petitioner : Mr. J.D. Mistri, Senior Counsel a/w Mr. Madhur Agarwal i/b Mint and Confreres For The Respondent : Mr. Anil C. Singh, Additional So .....

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petitioner's application for settlement under Chapter XIX A of the Act relating to Assessment Years 198999 to 201415. 3. This petition raises an interesting question : When can an assessment be said to have been made, for the purpose of it ceasing to be pending assessment, so as to oust the jurisdiction of the Commission to entertain a settlement application ? According to the petitioner, the issue is covered by the decision of this Court in Commissioner of Income Tax Vs. Income Tax Settlem .....

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ssment shall stand concluded on the date on which assessment is made. Thus, it is submitted that the service of order is irrelevant to decide whether the assessment (case) is pending with the Assessing Officer. 4. Before dealing with the rival contentions, the brief facts leading to this petition are adverted to as under : (a) On 7th January, 2014 a search was conducted on the petitioner and his premises. Consequent to above search, Notices were issued under Section 153A of the Act to the petiti .....

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Section 245C of the Act for the Assessment Years 199899 to 200708 with the Commission. An acknowledgement for the receipt of the application for settlement was also given to the petitioner by the Commission. (c) Thereafter in the evening of 30th March, 2016 itself the petitioner sought to serve a copy of the application for settlement filed by the petitioner with the Commission for the Assessment Years 199899 to 201415 with the Assessing Officer along with the intimation in the prescribed Form .....

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.. (illegible) ... Sd/ (d) In the above view, on 30th March, 2016 itself, the petitioner sent a copy of the settlement application on which the Assessing Officer had made endorsement along with prescribed intimation in Form 34BA at 7.30 p.m. by speed post. It was on 31st March, 2016, the assessment orders for A.Ys. 200809 to 201415 were issued and sent by Speed Post to the petitioner. (e) Thereafter, the petitioner's application for settlement came up for admission before the Commission on 7 .....

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onger pending. (f) On 12th April, 2016, the Commission passed the impugned order at the stage of Section 245D(1) of the Act rejecting the application for settlement. This on the ground that there was no pending assessment before the Assessing Officer on 30th March, 2016, when the application for settlement was filed with the Commission. 5. Mr. Mistri, learned Senior Counsel for the petitioner in support of the petition submits:( a) The issue arising in this petition is no longer res integra as t .....

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n the petitioner; and (c) The Commission itself on its website under the caption Frequently Asked Questions (FAQ) had specifically declared to all concerned that the sine qua non for approaching the Commission is that the assessment should be pending before the Assessing Officer. It further clarified that an assessment order would be considered to be pending till the date the same is served on the tax payer. This was undisputably so till 12th April, 2016, when the impugned order was passed. In t .....

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on the assessee therein was complete or not before filing of the application of settlement with the Commission for considering the words 'pending assessment'. The Court had no occasion in above case to consider the appropriate construction of the words on the date on which the assessment is made as found in Section 245A(b) Explanation (iiia) of the Act and its impact on the assessment being pending before the Assessing Officer. Therefore, the above decision does not bind this Court; (b) .....

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Act has specifically used the words the date on which assessment is made in contrast to other provisions in the Act which provides for the assessment order to be Served as found in Section 249(2)(c) of the Act or date of communication as found in Section 253(3) of the Act for the purposes of computing limitation to file an appeal. Similarly, Section 148 of the Act providing for reopening of assessment uses the word shall serve and Section 149 of the Act which prescribes the time limit for issuin .....

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l Board of Direct Tax wherein the earlier Circular No.3 of 2008 has been modified. By this Circular it is made clear that the assessment shall be deemed to have been completed on the date when the assessment order is passed. This was in substitution to the earlier position in Circular No.3 of 2008 of date of service being taken as the date when the assessment order is made. These Circulars have been issued in the context of Chapter XIX A of the Act i.e. Settlement of Cases. 7. Before adjudicatin .....

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xplanation - For the purposes of this clause - (i) ….. (ii) ….. (iii) ….. (iiia) a proceeding for assessment or reassessment for any of the assessment years, referred to in clause (b) of subsection (1) of section 153A in case of a person referred to in section 153A or section 153C, shall be deemed to have commenced on the date of issue of notice initiating such proceeding and concluded on the date on which the assessment is made; (iv) a proceeding for assessment for any asse .....

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that the core dispute raised before us viz. what is the date on which the assessment is said to be made for the purpose of ousting the jurisdiction of the Commission under Chapter XIX A of the Act to entertain an application for settlement, was a subject of consideration by this Court in ITSC (supra). 9. In the facts before the Court in the above case of ITSC (supra), the assessment order was passed on 18th March, 2013 and sent by Speed Post on 18th March, 2013 and necessary entry was also made .....

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e Assessing Officer for the Commission to entertain the application. The aforesaid decision of this Court also cited before the Commission. However, the impugned order distinguishes it on the ground that in the aforesaid decision, the Court has specifically stated that it was not required to consider any larger controversy on the effect of any amendment, which was made to the definition of word case . We were not able to understand the distinction sought to be made in the context of the dispute .....

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ation is binding upon the Commission and upon the Revenue. In fact, we specifically asked the learned Additional Solicitor General whether decision of this Court in ITSC (supra) has been appealed before the Supreme Court. However, he was not in position to give a categorical answer. Therefore, we proceed on the basis that the above decision is in force, not having been stayed by the Apex Court. 10. However, the learned Additional Solicitor General persisted in submitting that decision in ITSC (s .....

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rder. This submission in turn is supported by the Parliament making use of different words herein then that of service , issue or communicated as used in the other provisions of the Act. Therefore, this difference in language must be given a meaning and it cannot mean service . These distinctions now being raised are of no avail as the Revenue had raised this very issue viz. the assessment was not pending on the date the application of settlement was filed with the Commission in ITSC (supra). Th .....

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ion that there was no pending assessment for the assessment year 201011 as the assessment order was already issued before the filing of the settlement application under Section 245C of the Incometax Act. 13. ….... Thus, when a notice had been served and assessment order has been passed for two assessment years referred to above, the Settlement Commission had no jurisdiction to accept the application. 20. In the rejoinder, Mr. Chhotaray submits that the present writ petition questions the .....

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assessment under this Act of any person in respect of any assessment year or assessment years which may be pending before an Assessing Officer on, the date on which an application under subSection (1) of Section 245C is made. 30. ….. For the assessment year 201011, the notice under Section 143(2) was issued as above but the assessee's representative pointed out that the Assessing Officer passed the order on March 18, 2013, and on the date on which the application before the Settlement .....

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as is noticed in paragraph nos. 7, 13, 20 and 28 as reproduced above. Therefore, the aforesaid decision can by no stretch be considered to have been rendered subsilentio. A decision would be subsilentio when a point does not fall for consideration. In the above case, this Court was concerned with the point / issue of when an assessment order was made for purposes of Chapter XIX A of the Act. In fact, this is an attempt by the Revenue to reopen a principle laid down by a coordinate bench of the C .....

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, the law of precedents. This Court in ITSC (supra) has declared that for purposes of making an application for settlement, a case i.e. an assessment would be pending till such time as the assessment order is served upon the assessee. The declaration of law by this Court is binding on all authorities within the State including the Commission. The petitioner was entitled to proceed on the basis that till the service of the assessment order, the case continues to be pending with the Assessing Offi .....

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ion for settlement would be accepted till service of the assessment order. Admittedly, this representation was made till the impugned order was passed on 12th April, 2016. We find that in the present facts, the petitioner was entitled to act upon the above representation. It is not fair for the State to now take up the stand that on the proper interpretation of the provisions of law, the representation made by it is not in accordance with law. At the very highest, even according to the Revenue, .....

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sustainable. 14. The learned Additional Solicitor General also sought to support the impugned order of the Commission on the basis that CBDT Circular No.14 of 2014 which clarifies that for the purpose of Chapter XIXA of the Act, an assessment would cease to be pending case, when an assessment order is passed. This is in substitution of the earlier Circular No.3 of 2008 which provided that an assessment order would be said to have been made only on it being served upon the assessee for the purpos .....

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out that Mr. Mistri, the learned Senior Counsel during the course of his submission placed reliance upon the decision of the Kerala High Court in Commissioner of Agricultural IncomeTax Vs. Kappumalai Estate 234 ITR 187. The Kerala High Court in the above case, consider an identical provision also found in Section 35(2) of the Agricultural Income Tax which provided that no order of assessment and / or reassessment shall be made after the expiry of four years from the end of the year for which th .....

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