TaxTMI 
TaxTMI 
2025 (6) TMI 2129
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....1 These Writ Petitions are connected to each other and, as such, are taken up and disposed of by this common order. B. The Facts: 2. On 25.10.2018, the Income Tax Department conducted a search under Section 132 of the Income Tax Act, 1961 (in short, 'the Act') at the premises of DSSPL and VVM and yet another entity, and certain materials and documents were seized. Thereafter, on 28.11.2019, notices were issued to all three entities for the assessment years from 2013 - 2014 to 2018 - 2019. While the proceedings were pending, it is the case of DSSPL and VVM that they contemplated approaching the Income Tax Settlement Commission (ITSC) under Section 245(c) of the Act. During this period, the Government of India introduced a Finance Bill on 01.02.2021, proposing to discontinue the ITSC and constitute an Interim Board of Settlement (IBS) for pending cases. No new applications were filed with effect from 01.02.2021. 2.1. On 04.03.2021, feeling aggrieved by the proposal that no new applications shall be filed, the petitioners filed W.P.(MD) Nos. 4661, 4664, and 4668 of 2021 to direct the IBS to take the petitioners' applications on file. A common interim order was pas....
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.... orders, the following interim order was passed after considering the interim order passed by the Principal Bench of this Court. Paragraph Nos. 2, 3 and 4 of the said order dated 30.04.2021 are extracted hereunder for ready reference:- "2. Today when the matter is taken up for hearing, the learned Special Government Pleader has produced a copy of the order dated 17.04.2021 passed by the Principal seat in similar matter in W.P.No.9467 of 2021 and the relevant portion is extracted hereunder:- "The petitioner challenges the validity of certain amendments to the Income Tax Act, 1961. Simultaneously, the petitioner seeks a stay on the assessment proceedings on the ground that if the assessment is completed and the assessment order implemented, the writ petition may become infructuous. 2.It may not be appropriate to stop the assessment process midstream. However, the order of assessment and the steps taken pursuant thereto will abide by the result of the writ petition." 3.She would further state that since the order of assessment is under progress, stopping of entire assessment would have a bearing on the limitation and therefore, suitable direction ma....
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....roceed to conclude the assessment, pass a final order and keep the order in a sealed cover and not publish the same or implement the same. 10. The learned counsel for the petitioners submitted that Section 153(C) of the Act gives sufficient protection in this regard and the circumstances which would stand saved have been clearly spelt out in the said provision. In any event, since the Courts have held that the assessment proceedings can go on, this Court is of the view that the assessment proceedings should not be interdicted and it should proceed and passing a final order, keeping it to a sealed cover is akin to not giving effect to the assessment order. If such procedure is adopted, the interest of not only the assessee as well as the Department will be protected, when a final decision is taken on the declaratory relief sought for." 2.7. Thus, it can be seen that the respective assessing officers were granted liberty to proceed with the assessment proceedings, conclude the assessment, and pass the final order; however, to keep the order in a sealed cover and not to publish or implement the same. The order was passed after holding that until the Writ of Declaration is ....
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.... 1,82,34,86,270 99,09,87,858 2018 - 19 (67,60,630) - - - - 2019 - 20 (43,41,889) - - - - TOTAL 7,69,73,151 25,26,29,350 3,42,26,27,207 3,17,39,01,002 2,54,25,46,203 Thus, it can be seen that a total income of Rs.317,39,01,002/- was assessed, and a tax liability of Rs.254,25,46,203/- was demanded. 2.11. On 09.07.2021, the Special Leave Petitions filed by DSSPL and VVM against the aforementioned interim order passed in W.P.(MD) Nos. 10014, 10019 and 10020 of 2021 came up for hearing before the Hon'ble Supreme Court of India. It was reported that assessment orders had already been passed, and liberty was sought to assail the assessment order. The SLP was sought to be withdrawn, and accordingly, the Hon'ble Supreme Court of India permitted the SLP to be withdrawn with the liberty prayed for. 2.12. Thereafter, contempt petitions were filed in Cont. Petn. Sr. Nos. 30488 and 30484 of 2021 for willful disobedience of the earlier interim orders. When the Contempt Applications came up for hearing, the Assessing Officer passed supplementary orders, categorically stating that the assessment orders shall not be given effect and t....
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....'ble High Court challenging the abolition of Income Tax Settlement Commission. Under these circumstances, the above mentioned assessment orders shall not be given effect and the resultant demand shall be kept in abeyance pending the finality of the Writ Petitions (cited under ref) filed in the Hon'ble High Court and the resultant demand will not be enforced until such time." 6. In the light of the above order, this Court is of the considered view, the interest of the assessee has been sufficiently protected and as the Assessing Officer has in no uncertain terms stated that the assessment order shall not be given effect to and the resultant demand shall be kept in abeyance, pending the finality of the Writ Petitions filed before this Court and the resultant demand will not be enforced until such time. 7. It is submitted by the learned counsel for the petitioner that in the event, there arises a need for the assesses to challenge the assessment order, which have been passed and uploaded and now agreed to be not given effect to, then the assessee's interest should be protected. 8. We have heard Mr.T.R.Senthilkumar, learned senior standing counsel....
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....in Jain Metal Rolling Mills' case (cited supra). Even while disposing of the above Writ Petitions, it was contended by DSSPL and VVM that the assessment orders passed in the meanwhile would not survive. However, the request was turned down, keeping it open to the petitioners to urge the said contention before the learned Single Judge, where the rejection order of IBS is being questioned. It has to be noted that the petitioners have filed W.P. No. 19948 of 2024, challenging the order of rejection passed by the IBS. It is contended by the petitioners that since the order of the IBS was passed on 20.11.2023, further fresh orders relating to the assessment in respect of the respective years should have been passed on or before 20.11.2024, as per Section 245 H A (1) (2) of the Act. 2.17. Thus, it is contended that after the aforementioned limitation period expired on 16.12.2024, the petitioners were informed that the assessment orders were no longer kept in abeyance, in view of the disposal of the W.P.(MD) Nos. 10014, 10019 and 10020 of 2021, and that arrears of tax were demanded from the petitioners. On 12.12.2024, the petitioners submitted a reply stating that when the assessme....
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.... Petitions in respect of the following years for the very same prayer of declaration as contained in the table below:- Sl. No. WP Petitioner name Prayer AY Assessed total income 1. 11470 VV Minerals Declaration Assessment order dated 26.04.2021 2012-2013 9,24,94,430 2. 11471 VV Minerals Certiorari Recovery notice dated 31.12.2024 2012-2013 to 2019-2020 362,05,85,969 3. 11472 VV Minerals Declaration Assessment order dated 24.06.2021 2013-2014 75,43,94,906 4. 11473 VV Minerals Declaration Assessment order dated 24.06.2021 2014-2015 27,15,96,014 5. 11474 VV Minerals Declaration Assessment order dated 25.06.2021 2015-2016 29,19,29,397 6. 11475 VV Minerals Declaration Assessment order dated 24.06.2021 2016-2017 47,91,79,382 7. 11476 VV Minerals Declaration Assessment order dated 24.06.2021 2017-2018 182,34,86,270 8. 11477 VV Minerals Declaration Assessment order dated 30.06.2021 2018-2019 NIL 9. 11478 VV Minerals Declaration Assessment order dated 30.06.2021 2019-2020 NIL C. Petitioners' Arguments : ....
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....sion Bench Judgment of the Gujarat High Court in Yogeshwar Developers Vs. Union of India [(2022) 138 taxmann.com 469 (Gujarat)] to contend that when the matters were pending before the Settlement Commission, there would be no jurisdiction for the regular assessing authorities to proceed further. Paragraphs 6 and 8 of the said Judgment are specifically referred to. 3.4. The learned counsel referred to the Judgment of the Division Bench in the Jain Metal Rolling Mills' case (cited supra) regarding the validity of the CBDT circular and the other provisions to contend that the petitioners' application shall be treated as an eligible application as per the CBDT circular. The Judgment of the Gujarat High Court in Sanjay Sevantilal Shah Vs. Interim Board for Settlement (IBS) - 1 [(2024) 160 Taxmann.com 255 (Gujarat)] is also relied upon. 3.5. The learned counsel would take this Court exclusively to the discussions contained in the Judgment of the Hon'ble Supreme Court in Commissioner of Income Tax, Mumbai Vs. Damani Brothers [(2003) 3 SCC 86], more specifically by pointing out paragraph No. 11, and would submit that it was a case where it was held that the commission had jurisdi....
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....ase '30 days after making the order' was considered, and it was held that unless the order was pronounced in the presence of the parties, only the communication of the order would amount to making the order itself. The learned counsel would rely upon the Constitutional Bench Judgment of the Hon'ble Supreme Court of India in State of Punjab Vs. Amar Singh Harika [(1966) SCC OnLine SC 48], more specifically paragraph No. 10, to contend that the order has to be communicated to the person affected by it, and until the order is communicated, the authority can even challenge the order, and it cannot even be recorded as provisionally incorrect. The learned counsel would also rely upon the Constitution Bench Judgment of the Hon'ble Supreme Court in Bachhittar Singh Vs. State of Punjab and Another [(1962) SCC OnLine SC 11], more specifically paragraph No. 10, where it has been categorically held that an order can only be effective after it is communicated to the officer or it is otherwise published. 3.10. Therefore, it is the contention of the learned counsel that even assuming for a moment that the assessment order was passed pending the proceedings, it was very much open to the....
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....999) 5 SCC 590] to contend that this is an issue estoppel against the petitioners. The learned ASG would thereafter submit that questions of bar or jurisdiction of the assessing officer should be raised at the earliest opportunity, and that a belated challenge to the same is barred by the statutory framework under Section 124 of the Act. Section 124 (3) mandates that the assessee's must raise an objection to the jurisdiction within one month of receipt of notice under Section 142 (1) of the Act, or before the completion of the assessment. 4.3. The learned ASG would rely upon the Judgment in Deputy Commissioner of Income Tax (Exemptions) and another Vs. Kalinga Institute of Industrial Technology [(2023) 454 ITR 582] to contend that the conduct of the petitioners amounts to a waiver of the plea. He would rely upon the Judgment of the Hon'ble Supreme Court of India in Commissioner of Income-tax Vs. Damani Brothers [(2003) 259 ITR 475 (SC)] to contend that unless specific orders have been passed deciding to proceed with the application, the settlement authority does not assume jurisdiction. Until the orders of assessment were passed, no such order had been passed, and the assess....
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....s being proceeded with, reports have to be called for from the Principal Commissioner, and after examining the records and giving the applicant an opportunity to be heard, the ITSC/IBS is entitled to pass such orders. It is essential to extract Section 245 F (1) and (2) of the Act, along with the provisos on which reliance is placed by the learned counsel for the petitioners. "245F.Powers and procedure of Settlement Commission. (1) In addition to the powers conferred on the Settlement Commission under this Chapter, it shall have all the powers which are vested in an income-tax authority under this Act. (2) Where an application made under section 245C has been allowed to be proceeded with under section 245D, the Settlement Commission shall, until an order is passed under sub-section (4) of section 245D, have, subject to the provisions of sub-section (3) of that section, exclusive jurisdiction to exercise the powers and perform the functions of an income-tax authority under this Act in relation to the case: [Provided that where an application has been made under section 245C on or after the 1st day of June, 2007, the Settlement Commission shall have such ex....
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....means- (a) in respect of an application referred to in clause (1), the day on which the application was rejected; (b) in respect of an application referred to in clause (ii), the 31st day of July, 2007; (c) in respect of an application referred to in clause (iii), the last day of the month in which the application was declared invalid; [(ca) in respect of an application referred to clause (iiia), the day on which the order under sub-section (4) of section 245D was passed not providing for the terms of settlement;] (d) in respect of an application referred to in clause (iv), on the date on which the time or period specified in sub-section (4A) of section 245D expires. (2) Where a proceeding before the Settlement Commission abates, the Assessing Officer, or, as the case may be, any other income-tax authority before whom the proceeding at the time of making the application was pending, shall dispose of the case in accordance with the provisions of this Act as if no application under section 245C had been made." (Emphasis supplied) 5.3. The proviso to Section 153 (2) of the Act prescribes the limitation period of one yea....
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....urther held that the limitation period would start only from the date of disposal of the Writ Petition. The entire order dated 16.07.2021 was extracted supra. Therefore, it can be seen that the order was passed on 24.06.2021 and communicated to the petitioners, and the communication also received the seal of approval of this Court, with the further embargo to keep the demand alone in abeyance and safeguard the petitioners' rights with reference to limitation. 5.7. Thus, it can be seen that on the date on which the assessment orders were passed, the applications were not made as per the provisions of the Act before the ITSC or IBS. The right was expressly curtailed by Section 245C only up to 31.01.2021, and no application was made by the petitioners until the allowed date. Thus, by exercise of extraordinary Writ Jurisdiction, the applications were directed to be received. The applications were just received, and no orders were passed rejecting the applications or proceeding with them further as per the Scheme of the Act. No such exercise could have been done. Everything was dependent upon the interim directions that were issued by the Courts of Law. Therefore, on the date the....
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....the Order in the contempt petition, they were validated, the demand was kept in abeyance, and the petitioners' limitation was saved until the disposal of the writ petition. Thus, the petitioners and the department will be bound by the Orders inter-parties. For the petitioners to file an appeal, the limitation period will run from the date of disposal of the writ petitions. As a matter of fact, under Section 245HA (2) of the Act, which is extracted supra, it can be seen that once the proceedings stood abated, the authorities are entitled to proceed as if the applications were never made. 5.12. Therefore, in this case, jurisdiction never became exclusively vested, and in view of the peculiar scenario, there was never a case for following the procedure of rejecting the application or allowing it to proceed further under Section 245D (1) of the Act. In such a scenario, when the assessment authority was expressly empowered by the interim orders of the Court, which permitted the petitioners also to make an application, while directing the authorities to receive the same, the petitioners, having accepted said orders of the Court, will be bound by the liberty that is granted by the very....