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TMI Blog1988 (7) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... to deal with the matter. The Tribunal, therefore, could not have during the pendency of the matter with the Settlement Commission taken up and decided the issue. In support of this stand, reliance is placed by the ITO on the decision of the Punjab and Haryana High Court in the case of R. I. Chandha v. ITO [1987] 168 ITR 591. Six months after this application was filed, on 8-6-1988, the ACIT, Central Circle XIV, has filed another misc. application (M. A. No. 95/Bom. /1988) in which exception is taken to the decision given by the Tribunal on merits in the following words : "4. As regards merits also, the Hon'ble ITAT have failed to appreciate the facts of the case and have taken as correct the submissions made by the representative of the assessee. This becomes evident from the perusal of the order of the Hon'ble Settlement Commission for the assessment year 1979-80 and 1980-81 made under Sec. 245D (1) of the IT Act. In para 13 of above referred order, the Commissioner observed that "to the extent the price charged from the PRC fell short of the cost price of the assessee, there has been an attempt on the part of the assessee to divert its profits to the subsidiary company and ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... misconceived. In this regard, it would be relevant to take note of certain dates on which the relevant orders were passed. The assessment order for the assessment year 1979-80 was passed on 24-9-1982. The CIT (A)'s order was passed on 18-3-1983. Application before the Settlement Commissioner was filed by the assessee on 26-8-1983 (29-6-1983 as per the assessee's counsel). The CIT issued notice u/s. 263 on 13-3-1984 (30-3-1984 as per the assessee's counsel) and passed an order under that section on 7-4-1984. The assessee filed an appeal to the Tribunal against the order passed by the CIT on.7-6-1984. The Settlement Commission allowed the application of the assessee to be proceeded with on 26-11-1984. The Tribunal in their order has stated in para 2 that a preliminary objection was raised by the assessee before the CIT that the company had filed a settlement petition under sec. 245C of the Act and that order u/s. 263 should not be passed until this application was decided by the Settlement Commission. The CIT rejected this argument on the ground that such application u/s. 245C filed in August 1983 had till April 1984 not been admitted by the Settlement Commission. It would appear tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1987 with effect from 1-6-1987) as under : "(b) "income-tax authority" means a Director of Inspection, a Commissioner, a Commissioner (Appeals), an Appellate Assistant Commissioner, an Inspecting Assistant Commissioner or an Income-tax Officer." "Even after the amendment, the term "income-tax authority" is defined in clause (d) of sec. 245A as income-tax authority specified in section 116. In both these sections, Incomes-tax Appellate Tribunal is not regarded as an Income-tax authority which would mean that the Settlement Commission cannot exercise or supersede the powers of the ITAT. This has been well settled by a decision of the Supreme Court in the case of CIT v. B. N. Bhattachargee [1979] 118 ITR 461. Therefore, it is, in our opinion, presumptuous for the department to say that the Tribunal had no jurisdiction to deal with this appeal when the CIT himself had rejected the assessee's objection on similar lines and proceeded to pass an order u/s. 263 and when the assessee had filed an appeal before the Tribunal against that order, well before the case was admitted by the Settlement Commission. For this reason also, we find that there is absolutely no substance in this misc. ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use notice, as stated earlier, was issued by the CIT in March 1984 long after the date on which the assessee made the application before the Settlement Commission. Therefore, the revision proceedings will not fall within the definition of the term 'case'. Besides, the assessee had withdrawn the appeal filed before the Tribunal against the CIT (A)'s order on 20-3-1983 and made the application to the Settlement Commission on 29-8-1983. The Tribunal followed the appeal against the CIT (A)'s order to be withdrawn by their order dated 25-8-1983. Section 245F (which was omitted by Finance Act, 1987 with effect from 1-6-1987) read as under : "245M. (1) Notwithstanding anything contained in this Chapter, any assessee who has filed an appeal to the Appellate Tribunal under this Act which is pending before it shall, on withdrawing such appeal from the Appellate Tribunal before the 1st day of October, 1984, be entitled to make an application to the Settlement Commission to have his case settled under this Chapter : Provided that no such assessee shall be entitled to make an application in a case where the Income-tax Officer has preferred an appeal under sub-section (2) of section 253 agains ..... X X X X Extracts X X X X X X X X Extracts X X X X
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