TaxTMI 
TaxTMI 
2016 (9) TMI 296
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....n an assessment be said to have been made, for the purpose of it ceasing to be pending assessment, so as to oust the jurisdiction of the Commission to entertain a settlement application ? According to the petitioner, the issue is covered by the decision of this Court in Commissioner of Income Tax Vs. Income Tax Settlement Commission & Anr. 375 ITR 483 (hereinafter referred to as ITSC) which holds that till such time the assessment order is served upon the assessee, the assessment proceedings are pending. Therefore, the Commission cannot refuse to entertain the application of settlement till such time the assessment order is served upon the applicant. This is contested by the Revenue on the ground that the above decision had no occasion to consider the plain words of the statute which provides that an assessment shall stand concluded on the date on which assessment is made. Thus, it is submitted that the service of order is irrelevant to decide whether the assessment (case) is pending with the Assessing Officer. 4. Before dealing with the rival contentions, the brief facts leading to this petition are adverted to as under : (a) On 7th January, 2014 a search was conducted on....
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....of pending assessments was not satisfied on the date when the application for settlement was filed i.e. 30th March, 2016. This for the reason that the order of assessment was passed on 30th March, 2016 itself and the assessment were no longer pending. (f) On 12th April, 2016, the Commission passed the impugned order at the stage of Section 245D(1) of the Act rejecting the application for settlement. This on the ground that there was no pending assessment before the Assessing Officer on 30th March, 2016, when the application for settlement was filed with the Commission. 5. Mr. Mistri, learned Senior Counsel for the petitioner in support of the petition submits:( a) The issue arising in this petition is no longer res integra as this Court in ITSC (supra) on an identical fact situation held that an assessment would cease to be pending before the Assessing Officer only when a copy of the assessment order has been served upon the assessee for the purposes of Chapter XIXA of the Act. (b) The impugned order dated 12th April, 2016 of the Commission could not have rejected the application for settlement filed by the petitioner on 30th March, 2016. This is so as till that date, a....
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....ppeal. Similarly, Section 148 of the Act providing for reopening of assessment uses the word "shall serve" and Section 149 of the Act which prescribes the time limit for issuing of notice invoking Section 148 of the Act, by use of the words "shall be issued". Thus, the Parliament has specifically in Explanation (iiia) to Section 245A(b) of the Act departed from the words "issued", served" or "communicated" which are normally found in the Act and used the words "the date on which assessment order is made". This change in the expression has to be given effect to; and (d) Reliance was placed upon the Circular bearing No.16 of 2014 dated 17th November, 2014 issued by the Central Board of Direct Tax wherein the earlier Circular No.3 of 2008 has been modified. By this Circular it is made clear that the assessment shall be deemed to have been completed on the date when the assessment order is passed. This was in substitution to the earlier position in Circular No.3 of 2008 of date of service being taken as the date when the assessment order is made. These Circulars have been issued in the context of Chapter XIX A of the Act i.e. Settlement of Cases. 7. Before adjudicating upon the r....
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....e the date on which the order of assessment was made. This was so held in the context of pending case before the Assessing Officer for the Commission to entertain the application. The aforesaid decision of this Court also cited before the Commission. However, the impugned order distinguishes it on the ground that in the aforesaid decision, the Court has specifically stated that it was not required to consider any larger controversy on the effect of any amendment, which was made to the definition of word "case". We were not able to understand the distinction sought to be made in the context of the dispute before the Commission in the present application for settlement. The learned Additional Solicitor General very fairly stated that the amendment to the word "case" which has been relied upon in the impugned order to distinguish the decision of this Court has no relevance to the present controversy. Thus, the principle laid down by this Court in ITSC (supra) viz. that assessment order is made when it is served for purposes of considering the jurisdiction of the Commission to entertain such an application is binding upon the Commission and upon the Revenue. In fact, we specifically as....
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....nt writ petition questions the jurisdiction of the Settlement Commission to entertain the application and which was not meeting the requirements set out in law. If the statutory requirements are not complied with, then the Settlement Commission must dismiss the application at the threshold. In the present case, the Settlement Commission has erred in not noticing the fact that the assessment order is already passed and served on the assessee. 28. .... The term "case" is defined in Section 245A(b) to mean 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 subSection (1) of Section 245C is made. 30. ..... For the assessment year 201011, the notice under Section 143(2) was issued as above but the assessee's representative pointed out that the Assessing Officer passed the order on March 18, 2013, and on the date on which the application before the Settlement Commission was filed, a copy of the order has not been served on the applicantsecond respondent". (emphasis supplied) 11. Therefore, the aforesaid issue was a subje....
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....sessment order. Admittedly, this representation was made till the impugned order was passed on 12th April, 2016. We find that in the present facts, the petitioner was entitled to act upon the above representation. It is not fair for the State to now take up the stand that on the proper interpretation of the provisions of law, the representation made by it is not in accordance with law. At the very highest, even according to the Revenue, the issue is not clear as it is subject to interpretation, at the very least, therefore, the Commission must be held bound by its representation. As it was its understanding on interpretation of Chapter XIX A of the Act. In any case, the petitioner could not be prejudiced for acting in terms of the representation. We are informed that the above representation is withdrawn by the Commission post 12th April, 2016. Therefore, on the above ground also in the present facts, the impugned order is not sustainable. 14. The learned Additional Solicitor General also sought to support the impugned order of the Commission on the basis that CBDT Circular No.14 of 2014 which clarifies that for the purpose of Chapter XIXA of the Act, an assessment would cease t....