2006 (12) TMI 537

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....the order passed by the lower authorities was passed without appreciating the fact that neither the Assessing Officer nor ld. CIT(A) had any jurisdiction to pass any orders in the instant case as the assessee is before the Hon'ble Settlement Commission for the assessment year 1995-96 and by virtue of section 245F(2) of the Income-tax Act, 1961, the Settlement Commission have exclusive jurisdiction to exercise the powers and perform the functions of the income-tax authority under the Act in relation to assessee's case. 2. The submissions of the assessee were not accepted by the Assessing Officer relying on section 245F(4) of the Act, the Assessing Officer observed that the issue raised in the proceedings initiated under section 147 of the....

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....ourse of assessment proceedings for the assessment year 1996-97, it was observed by the Assessing Officer that the assessee had taken a loan of Rs. 2,54,58,300 from M/s. Silk Product India out of which an amount of Rs. 2 crores was received during the period relevant to assessment year 1996-97 and balance amount of Rs. 54,58,300 was brought forward from assessment year 1995-96. Since loan of Rs. 2 crores was not held genuine while completing the assessment for the assessment year 1996-97, the proceedings under section 147 of the Act were initiated to bring the income of Rs. 54,58,300 as bogus loan from M/s. Silk Product India into tax net which escaped from the assessment. Therefore, the Assessing Officer was fully justified in issuing noti....

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....nt or reassessment which may be pending before an Income-tax authority on the date on which an application under sub-section (1) of section 245C is made. 7. Admittedly no direction as contemplated by sub-section (4) of section 245F of the Act has been issued by the Settlement Commission in this case. The assessee's case for the assessment year 1995-96 is already pending before the Settlement Commission. In the absence of any direction issued by the Settlement Commission under sub-section (4) of section 245F of the Act, we are of the view that the exclusive jurisdiction to exercise the powers and perform the functions of an Income-tax authority under the Act, rest with the Settlement Commission in view of sub-section (2) of section 245F o....