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TMI Blog2022 (2) TMI 229X X X X Extracts X X X X X X X X Extracts X X X X ..... of buildings, roads, dams, canals and power projects. The respondent No.1 - assessee filed return of income for assessment years 2006-07 to 2012- 13 under Section 139(1) of the Income Tax Act, 1961 ('Act' for short) and assessments came to be completed under Section 143(3) of the Act. Pursuant to the search conducted under Section 132 of the Act in the case of the assessee, the Assessing Officer issued notice under Section 153A of the Act after seizing certain incriminating material. The respondent No.1 - assessee filed return of income as declared in the original return for the assessment years 2006-07 to 2011-12. For the assessment year 2012-13, the assessee filed return under Section 139(1) of the Act declaring an income of Rs. 8,09,17,240/-. 3. During the pendency of the scrutiny of the said assessment proceedings, the assessee preferred an application before the Income Tax Settlement Commission offering additional income of Rs. 16,80,07,102/- for the assessment years 2008-09 to 2012-13. The Settlement Commission passed an order dated 03.04.2014 declaring the application filed by the respondent No.1 - assessee is valid, against which the Revenue preferred W.P.Nos.44007/2014 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e entertained the rectification application filed by the assessee. Learned Senior counsel argued that the Hon'ble High Court of Bombay in Star Television News Ltd., supra, has categorically held that the Court was not concerned with the issue of an application made to the Settlement Officer after 01.06.2007. It is further fortified in the concluding para that the entire gamut of the order was relating to fixing the cut-off date as 31.03.2008 and the same is held to be arbitrary. Consequentially, the provisions of Section 245HA(1)(iv) of the Act to that extent is declared to be arbitrary. Thus, the Hon'ble High Court of Bombay has dealt with Section 245D(4A)(i) of the Act and not with clause (iii) which applies to the present case. The learned Single Judge having considered these aspects has rightly allowed the writ petition which requires to be confirmed by this Court. 7. We have carefully considered the rival submissions of the learned counsel appearing for the parties and perused the material on record. 8. The undisputed facts are that the respondent No.1 - assessee filed an application before the Income Tax Settlement Commission under Section 245C of the Act along with the tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion was inserted with effect from 01.06.2010.] 10. In the case of Star Television News Ltd., supra, the assessee challenged the constitutional validity and legality of provision of Section 245HA(1)(iv) and Section 245HA(3) of the Act as inserted by the Finance Act, 2007 with effect from 01.06.2007 as being ultra-vires and violative of Article 14 of the Constitution of India. The Hon'ble High Court of Bombay having regard to the provisions which were relevant during the period as it stood then, has held in paragraph 8 as under:- "8. On a consideration of the above provisions, it would be clear that though earlier there was no mandatory time limit for the Settlement Commission to dispose of the application and it could as far as possible do within four years, by the Finance Act, 2007, a time limit has been set out under section 245D(4A). Another relevant aspect of the Finance Act, 2007, is that if the Settlement Commission is unable to pass final settlement order on 31.03.2008 in case of applications which were pending before 01.06.2007 it would ipso facto abate and consequence of section 245HA(3) would follow. The I.T. Authorities including the Assessing Officer then was entitl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 245HA(1)(iv), the Hon'ble Court has read down the amended provisions of Section 245HA(1)(iv) in paragraph 54 as under:- "54. From the above discussion having arrived at a conclusion that fixing the cut-off date as 31.03.2008 was arbitrary the provisions of section 245HA(1)(iv) to that extent will be also arbitrary. We have also held that it is possible to read down the provisions of section 245HA(1)(iv) in the manner set out earlier. This recourse has been taken in order to avoid holding the provisions as unconstitutional. Having so read, we would have to read section 245HA(1)(iv) to mean that in the event the application could not be disposed of for any reasons attributable on the part of the applicant who has made an application under section 245C. Consequently, only such proceedings would abate under section 245HA(1)(iv)." 13. Thus, the Hon'ble Court has held that the Settlement Commission must fulfill its mandatory statutory duty in disposing of such applications as are referred to in Section 245D(4A)(i) by the date specified therein except where prevented from doing so due to any reason attributable on the part of the applicant, and that an application in respect of wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laced reliance on the ruling of the Hon'ble High Court of Gujarat in M. Kantilal and Co. vs. Income Tax Settlement Commission [(2018) 94 taxmann.com 293 (Gujarat)] and M. Kantilal and Exports vs. Income-tax Settlement Commission [(2018) 94 taxman.com 295 (Gujarat)] wherein the applicants have approached the Hon'ble High Court of Gujarat contending that by virtue of operation of the statutory provisions, their settlement applications would likely to abate shortly for no fault of them. Admittedly, the applications were filed by the assessee before the Settlement Commission in those cases prior to 01.06.2007. In that scenario the Hon'ble High Court of Gujarat considering the case of Star Television News Ltd., supra, has held that the order of the Settlement Commission in disposing of the proceedings as having abated is unjustifiable. 17. The other grounds urged by the Revenue inasmuch as non-providing of reasonable opportunity etc., cannot be countenanced for the reason that the learned ASG has appeared for respondent No.1 - assessee and argued the matter in extenso. Considering the arguments of both sides, the learned Single Judge has proceeded to decide the writ petition. In the ci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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