TaxTMI 
TaxTMI 
2013 (9) TMI 52
X X X X Extracts X X X X
X X X X Extracts X X X X
....d to issue a notice under Section 143(2) of the Act for Assessment Year 2010 11 expired on 30 September 2011. Admittedly, no notice under Section 143(2) of the Act has been issued till 30 September 2011 or even thereafter. Therefore, it was not possible to complete the assessment under Section 143(3) of the Act before the expiry of the time to complete assessment under Section 153 of the Act which expired on 31 May 2013. (c) On 14 November 2012, the respondent No.2applicant filed an application for Settlement with respondent No.1- Settlement Commission. By the above application, respondent No.2applicant sought to settle its dispute for Assessment Years 201011, 201112 and 201213 with the revenue. (d) On 19 November 2012, the respondent No.1Settlement Commission passed an order under Section 245D( 1) of the said Act, allowing the settlement application to be proceeded with for all the three Assessment Years i.e. 201011, 201112 and 201213. (e) Thereafter, on 24 December 2012, the Commissioner of Income Tax forwarded his report in terms of Section 245D(2B) of the Act. The Commissioner of the Income Tax in his report challenges the jurisdiction of the respondent No.1Settlement ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pondent No.2 had filed its return of income on 26 September 2010. The period during which the notice under Section 143(2) of the Act could be issued, expired on 30 September 2011, while the application for settlement was made on 14 November 2012. Therefore, as no notice under Section 143(2) of the Act could be issued to respondent No.2applicant, no occasion to complete the assessment under Section 143(3) of the Act could arise. Thus, on the date the application was made to the respondent No.1Settlement Commission by respondent No.2applicant, there was no assessment pending before the Assessing Officer to enable the application being entertained. In view of the above, the respondent No.1Settlement Commissioner had no jurisdiction to entertain the application for settlement in so far it relates to Assessment Year 201011. 5 Per Contra, Mr. R.A.Dada, learned Senior Counsel appearing for respondent No.2applicant in support of the impugned order submits as under: (a) Admittedly no assessment for the Assessment Year 201011 has been made till the filing of the application on 14 November 2012 with the respondent No.1Settlement Commission. Therefore, the assessment continues to be p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ate to be specified therein, either to attend his office or to produce, or cause to be produced, any evidence on which the assessee may rely in support of the return; Provided that no notice under clause (ii) shall be served on the assessee after the expiry of six months from the end of the financial year in which the return is furnished." Section 153 (i) reads as under: " No order of assessment shall be made under Section 143 or section 144 at any time after the expiry of ( a) two years from the end of the assessment year in which the income was first assessable; or (b) one year from the end of the financial year in which a return or a revised return relating to the assessment year commencing on the 1st day of April 1988, or any earlier assessment year, is filed under subsection (4) or subsection (5) of section 139, whichever is later: Provided that ... ... ... ... .... .... ..." Section 245A reads as under: In this Chapter, unless the context otherwise requires: "( a) ......... (b) 'case' means any proceeding for assessment under this Act, of any person in respect of any assessment year or assessment year's which may be pending before an Assessing....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssessment order to the applicant." 7 We have considered the rival submissions. The undisputed facts are that when application for Settlement was filed on 14 November 2012, the time to issue notice under Section 143(2) of the Act to complete the assessment under Section 143(3) of the Act for Assessment Year 201011 had expired. In view of the above, it is the revenue's case that on the date of the application for settlement filed by respondent No.2applicant on 14 November 2012, there was no assessment pending before an Assessing Officer which would entitle respondent No.1Settlement Commission to exercise jurisdiction over the application for Settlement. The grievance of the revenuepetitioner is that in spite of the above, the respondent No.1Settlement Commission has allowed the settlement application to be proceeded with before it by the impugned order dated 31 December 2012. The respondent No.1Settlement Commission allowed the application for settlement of respondent No.2applicant, inter alia, for Assessment Year 201011 on the basis of its Special Bench decision dated 13 June 2008 in the matter of Rescuwear Corporation. In the matter of Rescuwear Corporation (supra), the Settleme....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ettlement Commission before the Gujarat High Court only to the extent it was admitted by the Settlement Commission for the Assessment Years 200506 to 200809. The revenue did not challenge the order of the Settlement Commission, admitting the application for settlement in respect of the Assessment Year 201011. The Gujarat High Court held that the application for settlement for the Assessment Years 200506 to 200809 were not maintainable as not only the period to issue a notice under Section 143(2) of the Act expired but also the period during which the assessment could be completed under Section 153 of the said Act had expired. It would, therefore, be noticed that before the Gujarat High Court, the issue for consideration was not a situation identical to the issue before us or before the Settlement Commission as in this case. We are concerned with Assessment Year 201011 where the fact situation is identical to Assessment Year 201011 in the matter before the Gujarat High Court in the matter of Amrish Shukla (supra). However, the revenue did not challenge the order of the Settlement Commission, admitting the application for the Assessment Year 201011 before the Gujarat High Court. Ther....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ring for respondent No.2 strongly relied upon Section 119 of the Act in support of his submission that is not open to the revenue to challenge the orders of the Settlement Commission particularly when the same is in accordance with CBDT circular dated 12 March 2008. In fact, he points out that even after the order of the Full Bench of the Settlement Commission in the matter of Rescuwear Corporation (supra), on 13 June 2008, the revenue has not chosen to withdraw the circular dated 12 March 2008. Therefore, it must follow that the CBDT circular dated 12 March 2008 being a Circular beneficial to the assessee must prevail and it is not open to the revenue to file a Petition contrary to the binding Circular dated 12 March 2008. In support of his submission, that circular issued by the CBDT are binding upon the revenue, Mr. Dada relied upon the decision of the Apex Court in the matter of K. P. Varghese v/s. Income Tax Officer, Ernakulam and Another 131 ITR page 597, wherein the Court has held that the instructions issued in the Circular issued by the CBDT was binding upon the department. The Court observed as under: " The two circulars of the CBDT to which we have just referred are l....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l be open to an assessee to file an application before the Settlement Commission so long as no order of assessment under Section 143(3) of the said Act has been passed within the period of time provided under Section 153 of the Act. However, as the Circulars issued by the CBDT are binding upon the authorities under the Act, we see no reason to interfere with the order of Settlement Commission as the Apex Court has taken a view in respect of Income Tax matters in Catholic Syrian Bank Ltd. v/s. CIT 2012(3)SCC 784 that Circulars issued by the CBDT which are beneficial to the assessee must be applied and observed as under: "Effect of Circulars 23. Now, we shall proceed to examine the effect of the Circulars which are in force and are issued by the Central Board of Direct Taxes (for short "the Board") in exercise of the power vested in it under Section 119 of the Act. Circulars can be issued by the Board to explain or tone down the rigours of law and to ensure fair enforcement of its provisions. These circulars have the force of law and are binding on the Income Tax Authorities, though they cannot be enforced adversely against the assessee. Normally, these Circulars cannot be igno....