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TMI Blog2017 (5) TMI 988X X X X Extracts X X X X X X X X Extracts X X X X ..... engaged in money lending business including providing accommodation loans. A search was conducted on his premises by the Directorate of Revenue Intelligence on 22nd July, 1986, which resulted in seizure of multiple documents as well as books of accounts. Certain benami accounts were also found. 3. Pursuant to the aforementioned application a report was filed by the Commissioner of Income Tax ('CIT') under Section 245D(1) of the Act before the ITSC. It is stated that the Department Representative ('DR') at the hearing of the ITSC supported the report of the CIT and asked for allowing the settlement application to put an end to the protracted litigation. 4. However, it appears that in the meanwhile on 28th March, 1995, the Assessing Officer ('AO') proceeded to pass assessment orders for each of the AYs 1986-87 to 1992-93. This was the second round with the earlier assessment orders having been set aside by the Commissioner of Income Tax (Appeals) ['CIT(A)']. By the assessment orders dated 28th March 1995, fresh demands were created. Interestingly, the assessment orders acknowledged that the Assessee informed the AO of the pendency of his application before the ITSC. The AO however ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessment proceedings "as if no application under Section 245C has been made." The last date for completion of this assessment was 13th May, 2009. 10. The Petitioner points out that after the abatement of his application before the ITSC, the AO took up the assessment proceedings only for AY 1993-94 and passed an order under Section 143(3) read with Section 245HA(2) of the Act on 20th March, 2009. However, no fresh assessment order for AYs 1986-87 to 1992-93 was passed. However, the AO raised a recovery of demand for AYs 1986-87 to 1989-90 and AY 1992-93 on the basis of the assessment order dated 28th March, 1995. The Petitioner then filed miscellaneous application dated 18th February, 2014 before the ITSC assailing the above demand. However, the ITSC dismissed the said application by its order dated 19th January, 2015 holding that it had become functus officio and could not deal with the application. Thereafter the present petition was filed challenging the said assessment order dated 28th March 1995 and the consequential demand. 11. The contention of Mr. Ved Jain, learned counsel appearing for the Petitioner, is that with the mandate of Section 245HA(2) of the Act being clea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 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; (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) Where a proceeding before the Settlement Commission abates, the Assessing Officer, or, as the case may be, any other income-tax authority before whom the proceeding at the time of making the application was pending, shall dispose of the case in accordance with the provisions of this Act as if no application under section 245C had been made. (3) For the purposes of sub-section (2), the Assessing Officer, or, as the case may be, other income-tax authority, shall be entitled to use all the material and other information produ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... code for settlement and that the relevant sub-section has to be interpreted in harmony with other provisions. Section 245 HA (2) cannot be read in isolation but along with Section 245 HA (3). Incidentally, none of the decisions cited at the bar appear to have interpreted these very provisions. 17. It was urged by Mr. Raghvendra Singh that Section 245 HA (2) would apply only where no order at all has been passed by the authority before whom certain proceedings had been pending on the date of the filing of the application before the ITSC. According to him, if the as in the present case, the AO had passed an assessment order prior to the order of the ITSC deciding to proceed with the application before it, then assessment such order must be given its full effect since it stood unaffected by anything that happened thereafter and in particular the abatement of the application before the ITSC. He contends that the expression 'shall dispose of the case' does not have to be literally interpreted as connoting a future activity but "would include a past completed activity". 18. The Court is unable to agree with the above submission. It is not possible to read into Section 245 HA ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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