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TMI Blog2019 (3) TMI 581X X X X Extracts X X X X X X X X Extracts X X X X ..... rd the relevant facts as briefly as possible. For convenience, such facts may be taken from Writ Petition No. 5997 of 2017. 3. Respondent No. 2 - assessee had applied for settlement of its cases under Section 245C of the Act. for assessment years 2008-09 to 2013-14. In such application for settlement, the assessee had not disclosed any additional income before the Settlement Commission in some of the assessment years. This settlement application passed through various stages envisaged under Section 245D of the Act, including to allow to proceed further under Section 245D(2C). The Settlement Commission had passed an order on 29.1.2015 under Section 245D(2C) of the Act in which it was held and observed as under:- 7. After perusal of the above 5 cases, we finally hold that the objection raised by the department was only on applicant's failure to disclose true and full income. In support of this contention, the department had not adduced any evidences or justification. The reply / rejoinder submitted by the applicant in response to rule 6 reports have adequately dealt with the issues raised by the department in the respective cases. As of now, we find that there is no information ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uded in the settlement application. Divorced from the fundamental concept of the assessment year, the words "income" and "tax" can have no meaning. When the Act says income not disclosed before the authorities, its meaning would be income in respect of an assessment year not any other meaning. Hence, when an application includes assessment year with nil or no disclosure of income, such assessment year fails the fundamental test / condition laid down in the provision of 245C(1). In that eventuality the Commission certainly cannot assume jurisdiction in respect of that assessment year with nil or no disclosure of additional income within the meaning of section 245C(1) This basic intent is very clear from the amended form 34B which requires disclosure of additional income, tax payable, interest payable, manner of deriving additional income to be stated assessment year-wise. This amended form was on the statute book w.e.f 2007. In this way the entire settlement scheme make harmonious sense. It is the statutory requirement that there should be disclosure of some undisclosed income for each assessment year included in the settlement application. To reiterate, in the absence of such discl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the order u/S. 245D(2C) dated 29.1.2015 i.e in his erstwhile capacity as a Member of the Additional Bench -I, Mumbai. The other contentions advanced by the Ld. AR have no relevance in the light of the foregoing discussion. The apprehension expressed by the Ld. AR regrading the invalidation of the assessment years with nil or no disclosure of additional income w.e.f date of order u/S. 245D(2C) is correct in as much as the invalidation had occurred under Section 245D(2C) dated 29.1.2015." 3.3 In relation to those assessment years where the Settlement Commission held that the application for settlement was invalid, the Assessing Officer passed separate orders of assessment in second and third week of July, 2017. We are informed that in some cases, the Assessing Officer himself has not made any additions. In assessments where the Assessing Officer has made additions, the assesssee has filed appeals. 4. In such background, the issue arises before us in relation to the order of the Settlement Commission, invalidating the settlement application by passing the order dated 31.5.2016 but relating it back to the original order of Section 245D(2C) dated 29.1.2015. In plain terms, this dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and, Mr. Mistri, learned senior counsel for the assessees strongly opposed this petition and contended as follows:- (i) The order under Section 245D(2C) invalidating the application can be passed at that stage and not thereafter. In the present case, the Settlement Commission had passed the order on 29.1.2015 allowing the settlement application to proceed further. Once having done that, the Settlement Commission could not have passed the fresh order that too at the stage of Section 245D(4); (ii) The prayer of the department is wholly untenable. The statute envisages important stages of settlement proceedings and also makes specific provisions for recommencement of the assessment if application for settlement is declared either invalid or having abated. Matching provisions for limitation have been made which simply cannot be extended. (iii) In any other view would amount to (a) recognizing two separate orders of Settlement Commission under Section 245D(2C) and (b) the impugned order would be one passed under Section 245D(2C) as well as under Section 245D(4) which the legislature simply does not envisage. (iv) Our attention was drawn to the provisions contained in Section 245D wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation under the said provision. Clause (vii) reads as under:- (vii) the period commencing from the date on which an application is made before the Authority for Advance Rulings under subsection (1) of Section 245Q and ending with the date on which the advance ruling pronounced by it is received by the Principal Commissioner or Commissioner under sub-section (7) of Section 245R,or" 11. In view of above statutory provisions, it was perhaps open for the assessee to argue before the Settlement Commission that previously an order, that too a reasoned order having already been passed by the Settlement Commission on 29.1.2015 allowing the application to cross the stage of Section 245D(2C), it was thereafter not open for the Settlement Commission to entertain any request of the department and to pass a fresh order declaring that in respect of certain assessment years, the settlement application was invalid. It was also perhaps open for the assessee to argue that in any case, the above combined order, one purported to be under Section 245D(2C) and another under Section 245D(4) could not have been passed. 12. In the present petition, we are not concerned with such contentions. The assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lication for settlement as invalid; (ii) such order shall be passed within 15 days of receipt of the report; (iii) application shall not be declared invalid unless opportunity is given to the applicant of being heard; (iv) If report has not been furnished within the prescribed time, the Settlement Commission would proceed further without the report. Under Section 245D(2C), thus the Settlement Commission could declare an application for settlement invalid, but such order has to be passed within prescribed time. In the present case, the Settlement Commission to overcome such time limit, passed an order giving it retrospective effect. If we recognize the powers of the Settlement Commission to pass such retrospective orders, the time limits envisaged by the legislature at various stages of settlement proceedings would be destroyed. 13. In the present case, the order passed by the Settlement Commission left six days to the Assessing Office to complete the assessments. We wonder what would be the situation if the Settlement Commission had passed such an order six days later than it has done. Be that as it may, we are clearly of the opinion that the Settlement Commission, while givin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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