TMI Blog2016 (12) TMI 675X X X X Extracts X X X X X X X X Extracts X X X X ..... - BOMBAY HIGH COURT] is not applicable to the facts of the present case as sought to be contended by the Revenue. The order passed by the Settlement Commission dated 27.5.2016 is beyond the time after the proceedings before it stood abated. As also contended by the Revenue that the petitioner having submitted letter dated 9.2.2016 and contended that the limitation is available up to 31.12.2016, the contrary contentions raised by the petitioner are unreasonable and unacceptable. It is to be mentioned here that consent of the parties cannot vest jurisdiction or extend the period of limitation. In that view of the matter, the said contention raised by the Revenue is hereby rejected. - Decided in favour of assessee - Writ Petition Nos. 46275-46289 of 2016 (T-IT) - - - Dated:- 7-12-2016 - L. Narayana Swamy, J. For the Petitioner : Sri Sukumar S, Adv. For the Respondent : Sri Prabhuling K Navadgi ORDER These petitions are filed by the petitioner challenging the order passed by the respondent No.1, Income-tax Settlement Commission, Chennai under Section 245D(4) of Income Tax Act, 1961, hereinafter referred to as `the Act for short, dated 27th May 2016 and 11th Au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tay of further proceedings was granted on 29th April 2015 up to 18th June 2015. On 18th June 2015, 2nd July 2015, 28th July 2015, 1st September 2015, 30th September 2015 and 8th October 2015 stay was not extended. Therefore, there was no stay from 18th June 2015 to 14th October 2015. Even thereafter, the writ petitions were listed before the Court on 3rd December 2015, 16th December 2015 and 13th January 2016, but, stay was not extended. 6. Section 245D(4A) of the Act provides that the Settlement Commission shall pass an order under Sub-section (4) of Section 245D of the Act in respect of the application made on or after 1st June 2010 within 18 months from the end of the month in which the application was made. The application was filed on 6th February 2014 and the respondent No.1 ought to have passed the order on or before 31st August 2015. However, the order was passed on 27th May 2016. 7. Petitioner states that there are several situations emerging on the peculiar facts of the case and the order of the Settlement Commission is clearly barred even after taking into consideration the period for which the stay was granted by this court in the Writ petitions. Clause (iv) of Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, the figures allegedly culled out from the hard discs are not real ones. No adequate time was provided to the petitioner to offer his comments as to the hard disc containing voluminous details running into thousands of pages. 10. The respondent No.2 has not mentioned as to whether the information retrieved was password protected. The absence of this vital information appears to be deliberate. The petitioner disowned all the entries in the digital evidence on account of several reasons mentioned in paragraph 34 of the petition. It is stated all the cash withdrawals in all the concerns have been meticulously accounted and there are no cash withdrawals which have been unaccounted for. The correctness and completeness of the audited regular books of account have never been questioned by the Department. The say of the Department that there may be inflation of wages is only surmise and suspicion. While the sundry payment in the debited folder is unauthenticated, the wages shown in the books is supported by vouchers. Therefore, the allegation that sundry payments have been booked as wages, is only a figment of imagination. 11. There are nine firms which have undertaken the wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner offered additional income of ₹ 16,80,07,102.00 for the Assessment Years 2008-09 to 2012-13. It is stated that this Court vide order dated 29th April 2015 granted interim order in the writ petition and the same was extended from time to time till 3rd December 2015. Writ Petition was disposed of on 18th January 2016. Pursuant to the disposal of the writ petition, the petitioner filed a letter dated 9th February 2016 contending that the period of pendency of the writ petition is to be excluded for the purpose of computing limitation provided under Section 245D(4A) of the Act. It was contended that time limit gets extended up to 31st December 2016. The Settlement Commission, by taking note of the letter arrived at a conclusion that the time limit would be up to June 2016. The Settlement Commission finally passed an order on 27th May 2016 by quantifying the tax liability of the petitioner taking into consideration the seized material, statements recorded during the course of search and also by examination of various physical evidences from hard discs and other material. 14. The petitioner filed an application seeking rectification of mistakes apparent from the record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, hereinafter referred to as `the Settlement Commission for short, on 27.5.2016 is barred by limitation. It is the contention of the petitioner that the decision of the Bombay High Court in Star Television News Ltd. Vs., Union of India Ors, 317 ITR 66 is not applicable to the facts of the present case. The said judgment was concerned with an application which was filed before 1.6.2007 and the order (Para-8) clearly stated that in the instant petition they were not concerned with an application made to the settlement commission after 1st June, 2007. On the date of judgment of Bombay High Court i.e., 7.8.2009 Section 245D(4A)(iii) which came into effect from 1.6.2010, was not on the statute and therefore, it cannot be said to have seized with the said provision. It is the statutory obligation on the part of the Settlement Commission to dispose of the application within the time frame and in case reason for the delay is not attributable on the part of the applicant and the Settlement Commission has not been prevented from fulfilling the mandatory statutory duty due to reason attributable on the part of the applicant, proceedings shall abate on the specified date under Section 24 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner is after 01.06.2010 and time limit prescribed as per Section 245D(4A)(iii) for the Income tax Settlement Commission to pass an order thereon was 18 months from the end of the month in which the application was made. This 18 months excluding the month in which the application was filed i.e., 6.2.2014 would come to an end on 31.08.2015. The Revenue filed W P No.44007/2014 W P No.2745-2750/2015 challenging the order passed by the Income tax Settlement Commission dated 03.04.2014 holding that the application filed by the petitioner is not invalid and obtained stay on 29.04.2015 till next date of hearing. On 9.6.2015 again the stay was extended till next date of hearing. The writ petitions were listed on 18.6.2015, 2.7.2015, 28.7.2015, 01.09.2015, 30.09.2015, 08.10.2015 but stay was not extended. The writ petition was listed on 14.10.2015 and the court ordered that the interim order earlier granted is continued until 3rd December, 2015. Thereafter writ petition was listed on 03.12.2015 and 16.12.2015 but stay was not extended. On 13.1.2014 arguments were heard and writ petition was reserved for judgment. On 18.1.2016 the order pronounced dismissing the writ petition. Only the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application was made. (iii) In respect of an application made on or after the 1 st day of June, 2010, within eighteen months from the end of the month in which the application was made. From the above it is clear that a statutory duty is cast on the Settlement Commission to pass the order within the specified period as mentioned above. The word used is shall and it is always mandatory and it cannot be directory as sought to be contended by the Revenue. 22. Now it is time to consider the judgment of the Bombay High Court in Star Television News case, referred to supra, on which the Revenue has mainly placed reliance. It is the contention of the Revenue that the said judgment has been affirmed by the Hon ble Apex Court in UNION OF INDIA v. STAR TELEVISION NEWS LTD., (2015) 12 SCC 665 and which judgment is referred to and relied upon by various other High Courts. 23. It is relevant to reproduce Para-49, 54 57 of the judgment in Star Television News case, referred to supra, which are as follows: 49. The principles set out above in the above- mentioned decisions squarely apply in the present case where the purported objective of the amendments introduced in Cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any reasons attributable on the part of the applicant who has made an application under Section 245-C. Considering the above, the Settlement Commission has to consider whether the proceedings had been delayed on account of any reasons attributable on the part of the applicant. If it comes to the conclusion that it was not so, then to proceed with the application as if not abated. Respondent 1 if desirous of early disposal of the pending applications, to consider the appointment of more Benches of the Settlement Commission, more so at the Benches where there is heavy pendency like Delhi and Mumbai. 24. The Bombay High Court in the above case was concerned with a case where the Settlement Commission had passed the order holding that the proceedings had abated. The delay caused in passing the order was not attributable to the assessee. On the conjoint reading of Sections 245C, 245D(4A) and Section 245HA(1)(iv) and considering the aims and objects of the legislation and the delay caused in passing the order was not attributable to the applicant, the Court was pleased to hold that only when the Settlement Commission is prevented from fulfilling its mandatory statutory duty due to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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