TaxTMI 
TaxTMI 
2021 (2) TMI 129
X X X X Extracts X X X X
X X X X Extracts X X X X
....arried out in the premises of Shri Pankaj Danawala CA and in the premises of M D Industries by the DDIT (Inv)- ll, Surat on 11/03/2005. During the survey Shri Pankaj Danaala, CA, was found to have created large number of bogus capital build up cases in the name of different person by adopting various modus operandi like showing more opening capita! then the closing capital of earlier year, gifts, interest income, etc. Further such funds were transferred to the various assessee of MD Group. Shri Pankaj Danawala in his statement recorded during the survery accepted this fact and Shri Kirit Patel, the then director of M D Industries Pvt Ltd vide his statement recorded on 20/05/2005 had further confirmed this finding of the department and owned up the bank accounts and benamidars. This fact has also been accepted by the assessee in the submission filed before the settlement commission. 2. On the basis of findings during the Survey, notice u/s 148 of the IT Act was issued to the assessee for AYs 1999-2000 to 2005-06. The details are as under: A.Y. Date of Notice Section 1999-2000 01/12/2005 148 2000-01 01/12/2005 148 2001-02 01/12/2005 148 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....reafter report under Rule 9 was submitted by the Department and the assessee has raised his objection to the Rule 9 report vide his submission dated 10/09/2018. The same was forwarded to the Pr. CIT(l), Surat for his comments. Hon'ble Pr. CIT(l) Surat vide letter dated 18.10.2018 has submitted comments on the submission of the assessee thereafter several hearing took place in the case during the proceedings u/s 245D[4) of the IT Act. 5. Therefore, from the proceeding before the Settlement Commission it is apparent that all the reports called for in the case have been submitted by the Department and the case is pending before the Settlement Commission at the stage of disposal. 6. Thereafter, the assessee has filed an appeal before the Hon'ble ITAT, Surat. The Hon'ble ITAT, Surat vide order No. 497 to 503 & 527/SRT/2019 dated 06.12.2019 has set aside the order of the Ld.CIT(A) to the Ld CIT(A) with a direction to decide the case on merit and allowed the appeal of the assessee for the statistics purpose. 7. Since, in this case, for the assessment years 1999-2000 to 2005-06 the case have been admitted by Hon'ble Settlement Commission....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... upon the decision of Co-ordinate Bench of ITAT in ITA No. 1635 to 1638 & 1655/Ahd/2016 for A.Y. 2003-04 & 2001-02 mentioning that the facts in both these case are identical. However, on verification of the cases relied upon by the Hon'ble ITA, it is found that the facts are different in as much as in the ITA NO. 1635 to 1638 & 1655/Ahd/2016, the cases were not admitted by the Income-tax Settlement Commission whereas in the case of the assessee M/s MD Industries Pvt LTd, its Settlement application have been admitted by the ITSC, Mumbai for A.Y. 1999-2000 to 2005-06 and same is pending for passing order u/s/245(D)(4) of the income-tax act. 10. Therefore, in view of the above facts, it is apparent that for the A.Y. 1999- 2000 to 2005-06, Hon'ble Settlement Commission Mumbai has exclusive jurisdiction over the assessee by virtue of provision of section 245F(2) of the income-tax act. Ld. CIT(A) being an income-tax authority had no jurisdiction over the assessee for the A.Y. 2005-06. Therefore Ld. CIT(A) had rightly dismissed the appeal of the assessee. Since in this case the assessee had no valid order to be contested before Hon'ble ITAT, therefore the app....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... for the proceeding to be simultaneously carried out with another income tax authority when the application is pending before Settlement Commission. Once the First Appellate Authority(FAA) does not have jurisdiction to take up the appeal, there was no question for any appealable order placed before the Tribunal, nor any direction when no such abatement order has been passed by Settlement Commission. In support of her submissions ld. DR for the revenue relied on the decision of Tribunal in JC Augustine (2010) 122 ITD 9 (Cochin), wherein it was held that if the matter is abated before ITSC, the erstwhile jurisdiction of the CIT(A) gets revived, thus, the assessee has to move a restoration petition before ld. CIT(A). The Ld. DR for the revenue prayed that order dated 06.12.2019 may be recalled as the appeal filed by the assessee was not maintainable and the same may be dismissed. 5. On the other hand, the Ld.Authorised Representative (AR) for the assessee submits that the Tribunal while deciding the appeal of assessee for A.Y. 1999-2000 to 2005-06 in ITA(s) No. 497 to 503/Srt/2019 vide its combined order dated 06.12.2019, set-aside the matter to the file of the Ld.CIT(A). The Reven....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s pending before the Settlement Commission as evident from para 4 of the order passed by the Tribunal in case of Kirit M.Patel in ITA No.1639/AHD/2016/SRT dated 29.05.2018, copy of the decision is available in record, as the same was referred and relied at the time of making submission, during the hearing of appeals. The ld.AR for assessee read out the following relevant portion of the said order: "The Ld. AR also pointed out that Hon'ble Settlement Commission passed order vide order vide its common order passed u/s. 245HA of the Act admitted some assessment years while abated some years. Al the admitted petitions/years of the Group were abated on 31-03-2008 due to amendment brought in by Finance Act 2007 in section 245D(4) of the Act, wherein if any settlement proceedings were not concluded by 31-03-2008 such proceedings would be abated. All the Group member of our Group, thereafter filed writ petitions in the Hon'ble Bombay High Court challenging the constitutional validity of certain sections of the Act as amended/inserted by Finance Act, 2007. After admitting the writ petitions of the Group members, interim order was passed by Hon'ble Bombay High Court in case of Shri ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....his order till orders/judgements of Hon'ble High Court is passes. "(emphasis supplied) Page 33, Para 21: "However, the peculiar facts are present group of 19 appeals is that the writ petitions of the respective assessees are pending before Hon'ble Bombay High Court therefore, we respectfully direct the authorities below that the order of Hon'ble High Court has to be followed respectfully as directed by us in para 9 of this order, and they will not proceed to pass appeal effect order in pursuant to this order tiff final decision/order is passed by Hon'ble High Court We also direct the authorities below that white giving effect to this order and to ensure the respectful and proper compliance of forthcoming order of Hon'ble High Court, we also find it appropriate and necessary to issue following directions to the authorities below: i) In case the Hon'ble Bombay High Court set aside the petitions to the Settlement Commission setting aside the abatement order then, the settlement commission will get exclusive jurisdiction to decide the cases and the AG will not be required to act further in any manner. ii) In case the Hon'b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....AR for the assessee, thus submits that order passed by the ld.CIT(A) is very much appealable, even though the appeal may have been rejected or held to be not maintainable on technical ground. 13. In other alternative submissions the Ld.AR of the assessee submits that issue raised by the Revenue in the Miscellaneous Application is debatable. Thus, the section 254(2) of the Act cannot be resorted for debatable issue. To support his submission, the Ld.AR for the assessee relied upon the decision of this Tribunal in Gufic Pvt Ltd. (MA No.37/SRT/52018). On the basis of aforesaid submissions, the Ld.AR for the assessee submitted that the contention of the Ld.DR for the revenue that no appeal lies against the order of Ld.CIT(A) is unsustainable or at least is debatable. 14. On third objection about the exclusive jurisdiction of the cases with ITSC, the Ld.AR for the assessee submits that no such argument was made by the Department during the course of hearing of appeal and on this ground the mistake pointed out by the Revenue deserves to be rejected. In without prejudice submission, the ld.AR for the assessee submits that a plain reading of section 254F(2) of the Act, it is clear th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t of all forms in case of an abatement by ITSC. The ld.AR for the assessee finally submits that as per the provision of section 245HA(2) of the Act, the proceeding of assessment would revive if application filed before the Settlement Commission gets abated. The Tribunal while passing the order in the present case has not decided the appeal on merit, but merely set-aside the matter to Ld.CIT(A) with certain directions. The directions of Tribunal are not contrary to the provision of section 254H(2) of the Act. It was pointed out by the ld.AR for the assessee that the ld.DR has also placed her submission based on the above section and agreed that proceedings are required to be revived in the event of abatement of petitions by ITSC. The Ld.AR for the assessee prayed that there is no mistake in the order passed by the Tribunal and would submit that applications filed by the Revenue may be rejected. 16. After conclusion of hearing both the parties were directed to file their respective submissions. In compliance of our directions, both the parties also filed their submissions in writing, repeating the same submissions, which we have narrated above. The submission of both the parties w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n process or reasoning. If the issue is debatable and not patent and clear, then the provision of section 254(2) cannot be invoked and the remedy lies under section 260A of the Income tax Act. Therefore, we reject the submissions of Ld. DR for the revenue on first two objections. 20. And for third objection,we have noted that the ld. AR for the assessee vehemently submitted that while adjudication the appeal of the assessee, the Tribunal relied on the decision in ITA No.1635 to 1638 & 1655/AHD/2016, for limited purpose for condoning the delay. We find merit in the submissions of ld.AR for the assessee that reliance on the order ITA No.1635 to 1638 & 1655/AHD/2016 was only for condoning the delay. We noted that the revenue has not raised grievances about the condonation of delay in admitting the appeal. We have further seen that the cases of assessee are similar on facts as in case of Kirit M. Patel bearing no.1639, 1821 and 1822/AHD/2016 and 678/AHD/2015 and other group cases which were also restored by the Tribunal to the file of LD. CIT(A), hence, the Tribunal in the present case has made no mistake, much less apparent mistake while following the order of the Tribunal in gr....