TaxTMI 
TaxTMI 
2012 (11) TMI 766
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....t of four assessment years. The last date for completing scrutiny assessments as provided by the law expired on different dates. A tabular statement disclosing the relative assessment years, the dates on which returns were filed and the dates on which the time provided by law expired, is extracted below: Assessment Year Date of filing return Last date for completion of assessment 2004-05 20.10.2004 31.10.2005 2005-06 19.10.2005 31.10.2006 2007-08 31.10.2007 31.10.2008 2008-09 26.09.2008 30.09.2009 4. In the above circumstances, on 05.08.2011, the assessee filed an application before the Settlement Commission seeking a settlement of its cases. By the impugned order dated 28.08.2011, overruling the objections of the petitioner, the Commission by a majority order (2:1) decided to entertain the settlement application. The Revenue had objected to the maintainability of the application, contending that the foundational condition, i.e. the need for a "case" to be pending before any Income Tax forum had not been fulfilled. 5. Learned counsel for the revenue contended that the Commission erred in law in admitting the....
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....submitted counsel, the intendment of the provisions was that proceedings must be deemed to remain "pending" even where no order under Section 143/144 is made within the prescribed time limit. In support of this argument, counsel placed reliance on K.L. Varadarajan v. Commissioner of Income Tax, Madras, AIR 1974 SC 2357. 8. This Court has considered the arguments advanced. Section 245A(b) reads as: "245A.(b) "case" means any proceeding for assessment under this Act, of any person in respect of any assessment year or assessment years which may be pending before an Assessing Officer on the date on which an application under sub-section (1) of section 245C is made: Provided that - (i) a proceeding for assessment or reassessment or re-computation under section 147; (iv) a proceeding for making fresh assessment in pursuance of an order under section 254 or section 263 or section 264, setting aside or canceling an assessment' shall not be a proceeding for assessment for the purposes of the clause. Explanation. - For the purposes of this clause - (i) a proceeding for assessment or reassessment or re-computation referred to in clause (I) of the proviso shall be....
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...., for proceedings would be deemed to continue eternally, if no order of assessment were made and no notice under section 148 were issued. The interpretation suggested by Dr. Pal that proceedings would be deemed to continue for a period of six years and nine months from the end of the relevant Assessment Year, within which period as assessment might be done under section 147, upon notice under section 148 would also involve some modification of the literal meaning of the Explanation iv to section 245A(b). 35. There can be no dispute with the proposition that where a strict and literal interpretation produces an absurd and unjust result, which could never have been the intention of the legislature, the Court might modify the language used by the legislature or do some violence to it so as to achieve the obvious intention of the legislature and produce a rational construction. 36. As held in K.P. Varghese v. Income Tax Officer reported in 131 ITR 597 (SC) and as held by Lord Denning in (1969) 2 All. E. R. 912 and approved by the Supreme Court in AIR 1997 SC 1519 "whenever a statute comes up for consideration it must be remembered that it is not within the human powers to foresee....
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....fore the assessment officer. In the facts of this case, the assessee filed its returns for four successive years; no notice under Section 143 (3) was issued. The AO lost jurisdiction to deal with those matters on the expiry of 21 months' period reckoned from the date(s) when the returns were filed. In Calcutta Discount Company Limited v. Income-tax Officer & others, AIR 1961 SC 372, the Supreme Court had ruled that an assessment proceeding commences from the date when the assessee files its return. The terminus quo therefore would be the last date by which the Assessing Officer can legally pass an order. Once that period lapses, the officer loses jurisdiction and authority to issue any order. The possibility of his issuing a notice under Sections 147/148 is in the realm of potential exercise of jurisdiction; till notice is actually issued, nothing is "pending" before the AO. Parliament consciously directed the tax administrators not to entertain a settlement application, in cases when a reassessment notice is issued. Parliamentary intent having been expressed in clear terms, the Courts cannot, by adopting a strained interpretation, thwart it, by holding that in case a notice is iss....