Shri Jashwantiben T.Patel L/h of late Thakorbhai M.Patel, Surat V. The Income tax Officer,Ward-3(4), Surat

ITA 937/AHD/2010

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3620 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 29-04-2016
• Assessment Year: 1992-1993
• Appeal Filed On: 30-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA SINGH
• Keywords: Period of limitation; Cancellation of registration
• Section: 144; 154

Judgement Text

, A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ./ ITA.NO.937/AHD/2010 [ASSTT.YEAR 1992-93] LATE SHRI THAKORBHAI M. PATEL L/H. JASHWANTIBEN T. PATEL 39, SUGAM SOCIETY RANDER ROAD, SURAT. PAN : ACVPP 3420 A VS ITO, WARD - 3(4) SURAT. ./ ITA.NO.938 AND 939/AHD/2010 [ASSTT.YEAR 1984-85] M/S.PATEL LAND CORPORATION 39, SUGAM SOCIETY RANDER ROAD, SURAT. VS ITO, WARD - 3(4) SURAT. ./ ITA.NO.569/AHD/2012 [ASSTT.YEAR 1992-93] ITO, WARD - 3(4) SURAT. VS LATE THAKORBHAI M. PATEL THROUGH L/H. JASHWANTIBEN T. PATEL 39, SUGAM SOCIETY ADAJAN PATIA, RANDER ROAD SURAT 395 005. ,- / (APPELLANT) ./ ,- / (RESPONDENT) REVENUE BY : SHRI NARENDRA SINGH, SR.DR ASSESSEE BY : SHRI BHAVIN MARFATIA, AR / DATE OF HEARING : 29/04/2016 / DATE OF PRONOUNCEMENT: 01/06/2016 ITA NO.937/AHD/2011 & 3 OTHERS 2 01/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: ITA NO.937/AHD/2010 IS DIRECTED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE LD.CIT(A) DATED 29.1.2010 FOR THE ASST.YEAR 1992-93. THE ASSESSEE HAD MOVED AN APPLICATION UND ER SECTION 154 OF THE INCOME TAX ACT, 1961 BEFORE THE AO. THIS APPLI CATION WAS DISMISSED ON 19.3.2010. THE ASSESSEE FILED AN APPE AL BEFORE THE LD.CIT(A) WHICH WAS ALLOWED ON 30.11.2011. THE REVE NUE IS CHALLENGING THIS ORDER OF THE CIT(A) IN THE CASE OF LATE SHRI THAKORBHAI M. PATEL IN THE ASSTT.YEAR 1992-93 VIDE ITA NO.569/ AHD/2012. THE ITA NO.938/AHD/2010 IS DIRECTED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE LD.CIT(A) DATED 2 9.1.2010 PASSED FOR THE ASSTT.YEAR 1984-85. ITA NO.939/AHD/2010 IS ALSO FILED BY THE ASSESSEE A GAINST THE ORDER OF THE LD.CIT(A) DATED 27.1.2010 PASSED FOR T HE ASSTT.YEAR 1984- 85. IN THIS APPEAL, THE ISSUE INVOLVED IS THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF THE AO IN CANCELLING THE R EGISTRATION OF FIRM UNDER PROVISION OF SECTION 186(2) OF THE INCOME TAX ACT. IN THE QUANTUM APPEAL I.E. ITA NO.937/AHD/2010 AND 938/AHD/2010 BOTH THE ASSESSEES HAVE TAKEN PRELIMIN ARY ISSUE, WHEREBY, THEY HAVE PLEADED THAT THE ASSESSMENT ORDERS WERE P ASSED AFTER EXPIRY OF LIMITATION, THEREFORE, THESE ASSESSMENT ORDERS DESE RVE TO BE QUASHED IN RESPECTIVE CASES. ITA NO.937/AHD/2011 & 3 OTHERS 3 OTHER TWO APPEALS, ONE AT THE INSTANCE OF ASSESSEE AND ONE AT THE INSTANCE OF THE REVENUE IN BOTH THE CASES RELATE TO PROCEEDINGS INITIATED UNDER SECTION 154 AND 186(2) OF THE INCOME TAX ACT. IF IT IS HELD THAT THE ASSESSMENT ORDERS WERE TIME BARRED, THEN BOTH T HE ASSESSMENT ORDERS WOULD BE QUASHED. CONSEQUENT THEREUPON, OTHER TWO APPEALS WOULD BECOME REDUNDANT. THEREFORE, WE FIRST TAKE ITA NO .938/AHD/2010 AND 937/AHD/2010. 2. IN THE CASE OF PATEL LAND CORPORATION, THE ASSES SEE HAS FILED A LIST OF EVENTS. IT IS PERTINENT TO TAKE NOTE OF CERTAIN DATES AND DEVELOPMENT TAKEN PLACE ON THESE DATES. THEY READ AS UNDER: 04-8-1987 RETURN OF INCOME WAS FILED 30-3-1988 ASSTT. ORDER WAS PASSED AGAINST WHICH TH E ASSESSEE FILED AN APPEAL BEFORE THE C.I.T. (APPEAL), SURAT 11-1-1989 THE C.I.T. (APPEAL) PASSED THE APPELLATE ORDER AND THEREBY DELETED ALL THE ADDITIONS MADE TO THE RETUR NED INCOME. AGAINST THE SAID ORDER OF C.I.T. (APPEAL), THE DEPARTMENT HAD FILED APPEAL BEFORE THE I.T.A.T. AHMEDABAD. 16-2-1995 THE I.T.A.T HAD SET-A-SIDE THE ASSESSMEN T ORDER PASSED BY THE ASSESSING OFFICER AND DIRECTED TO REFRAME TH E ASSTT. ORDER. 31-3-1995 ASSTT. ORDER PASSED BY THE ASSESSING OFF ICER U/S 144 OF THE ACT AND REGISTRATION TO THE FIRM WAS REFUSED ON THE BASIS OF RECORDED STATEMENT OF TWO PARTNERS AGAINST WHICH AN APPEAL WAS FILED BEFORE THE C.I.T. BARODA. 12-9-1995 THE C.I.T. (APPEAL) BARODA SET-A-SIDE T HE ASSESSMENT TO THE ASSESSING OFFICER. 26-9-1995 SETTLEMENT APPLICATION U/S 245C WAS FILED BEFORE THE SETTLEMENT COMMISSION, MUMBAI. 21-5-1996 DATE OF ADMISSION OF SETTLEMENT APPLICAT ION U/S 245D(1) OF THE ACT. 31-7-2007 AS THE TAXES AND INTEREST PAYABLE AS P ER APPLICATION, WAS NOT FULLY PAID BEFORE 31-7-2007 AS REQUIRED AS PER ITA NO.937/AHD/2011 & 3 OTHERS 4 AMENDMENT BROUGHT BY FINANCE ACT, 2007, T HE PROCEEDING BEFORE SETTLEMENT COMMISSION ARE ABATED, AS THE MANDATORY REQUIREMENT TO PAY T HE TAXES AND INTEREST WAS NOT FULFILLED BY THE ASSESSE E FIRM. 31-7-2008 DATE WITHIN WHICH THE PENDING ASSESSMENT WAS REQUIRED TO BE COMPLETED BY THE ASSESSING O FFICER AS PER MANDATORY REQUIREMENT U/S.245HA(1)(2) READ WITH EXPLANATION AND AS PER 2ND PROVISION OF SECTION 153, BUT THE ORDER IS NOT PASSED ON OR BEFO RE 31.7.2008. 30-3-2009 THE ASSESSING OFFICER HAS PASSED THE ASST T.ORDER WHICH IS TIME BARRED, HIT BY LIMITATION. 3. IN THE CASE OF JASHWANTIBHAI T. PATEL, FACTS ARE THAT AN ASSESSMENT ORDER WAS PASSED UNDER SECTION 144 OF THE INCOME TA X ON 31.3.1995. THE AO HAS DETERMINED THE TAXABLE INCOME OF THE ASSESSE E AT RS.21,12,520/-. THE ASSESSEE CARRIED THE MATTER IN APPEAL, AND THE LD.CIT(A) HAS SET ASIDE THE ASSESSMENT ORDER VIDE ORDER DATED 12.9.1995. T HE LD.CIT(A) REMITTED THE ISSUE TO THE FILE OF THE AO FOR FRESH ADJUDICATION. ON 26.9.1995, THE ASSESSEE APPROACHED SETTLEMENT COMMI SSION BY WAY OF AN APPLICATION UNDER SECTION 245C OF THE INCOME TAX ACT. THIS APPLICATION WAS ADMITTED BY THE SETTLEMENT COMMISSI ONER UNDER SECTION 245(D)(1) OF THE ACT. ACCORDING TO THE ASSESSEE, T HERE WAS AN AMENDMENT IN SECTION 245D AND NEW PROVISION I.E. (2 D) WAS INSERTED BY FINANCE ACT, 2007 W.E.F. 1.6.2007. ACCORDING TO TH E NEWLY INSERTED PROVISION, THE ASSESSEE IS REQUIRED TO DISCHARGE IT S TAX LIABILITY AND ADDITIONAL TAXES ON THE INCOME DISCLOSED ON SUCH AP PLICATION ALONG WITH INTEREST BEFORE 31.7.2007. IN CASE AN ASSESSEE FAI LS, THEN, THE APPLICATION DEEMED TO HAVE BEEN AS NOT PROCEEDED WITH. THE CON TENTION OF THE ASSESSEE WAS THAT AS PER SUB-CLAUSE (4) OF SECTION 245HA R.W.S SECTION ITA NO.937/AHD/2011 & 3 OTHERS 5 245(2D), ITS APPLICATION WOULD BE DEEMED TO HAVE BE EN ABATED ON 31.7.2007 ON ACCOUNT OF NON-PAYMENT OF TAXES. THE AO WAS REQUIRED TO PASS THE ASSESSMENT ORDER WITHIN A PERIOD OF ONE YE AR FROM 31.7.2007. THIS HAS BEEN CONTEMPLATED IN SECOND PROVISO TO SEC TION 153(4) AS PER CLAUSE (4) TO SECTION 245HA. THE AO HAD ISSUED A N OTICE IN THE CASE OF JASHWANTILAL T. PATEL ON 6.3.2009. HE HAS PASSED A N ASSESSMENT ORDER ON 31.3.2009, HENCE, THE ASSESSMENT ORDER IS TIME BARR ED. THE AO DID NOT CONSIDER THIS PLEA OF THE ASSESSEE, AND HIS CONCLUS ION MET THE APPROVAL OF THE LD.CIT(A). 4. BEFORE US, THE LD.COUNSEL FOR THE ASSESSEE CONTE NDED THAT A BARE PERUSAL OF THE CLAUSE (2D) WITH EXPLANATION AS WELL AS THE PROVISION OF SECTION 245(HA) ALONG WITH ITS EXPLANATION WOULD INDICATE THAT IF AN APPLICATION HAS BEEN PROCEEDED WITH UNDER SECTION 2 45(D)(1) THEN, ACCORDING TO THE NEWLY INSERTED PROVISION, THE ASSE SSEE WAS REQUIRED TO MAKE PAYMENT OF TAXES ALONG WITH ADDITIONAL TAXES B EFORE 31.7.2007. IN CASE THE ASSESSEE FAILS, THEN, THE APPLICATION WOUL D NOT BE PROCEEDED WITH ANY MORE. IN OTHER WORDS, IT WILL BE DEEMED TO HAV E BEEN DISMISSED ON 31.7.2007. IN THE PRESENT CASES, BOTH THE ASSESS EE HAVE FAILED TO MAKE PAYMENT OF TAXES BEFORE THIS DATE, AND THEREFORE, T HEIR APPLICATIONS WERE ABATED BEFORE THE SETTLEMENT COMMISSION. 5. THE CASE OF THE REVENUE, ON THE OTHER HAND, IS T HAT UPTO AND UNTIL SETTLEMENT COMMISSION PASSES AN ORDER UNDER SUB-SEC TION 4 OF SECTION 245D, THE APPLICATION WOULD NOT BE CONSIDERED AS AB ATED IMPLIEDLY. THE IMPLIED ABATEMENT WOULD BE CONSTRUED ON 31.3.2008 I .E. THE TIME LIMIT, OTHERWISE FOR ADJUDICATION OF THE APPLICATION, AS I F THE TAXES PAID BY THE ITA NO.937/AHD/2011 & 3 OTHERS 6 ASSESSEE IN COMPLIANCE TO SECTION 245(2D), AND IF T HIS TIME LIMIT IS BEING CONSIDERED, THEN, THE ASSESSMENT ORDER PASSED ON 31 .3.2009 ARE WITHIN A LIMITATION. THE LD.COUNSEL FOR THE ASSESSEE PLACE D ON RECORD COPY OF THE ITAT (AMRISTAR) BENCH DECISION RENDERED IN THE CASE OF GURMEET SINGH VS. DCIT, 49 TAXMANN.COM 431 WHEREIN EXACT SITUATIO N HAS BEEN CONSIDERED. 6. WE HAVE CONSIDERED RIVAL CONTENTIONS AND GONE TH ROUGH THE RECORD CAREFULLY. FEW PROVISIONS HAVE DIRECT BEARING ON T HE CONTROVERSY ON HAND. THEREFORE, IT IS PERTINENT TO TAKE NOTE OF THESE SECTIONS. THE SUB- SECTION (2D) OF SECTION 245 INSERTED BY WAY OF FINA NCE ACT, 2007 W.E.F. 1.6.2007, WHICH READS AS UNDER: WHERE AN APPLICATION WAS MADE UNDER SUB-SECTION (1) OF SECTION 245C BEFORE THE 1ST DAY OF JUNE, 2007 AND AN ORDER UNDER THE PROVISIONS OF SUB-SECTION (1) OF THIS SECTION, AS T HEY STOOD IMMEDIATELY BEFORE THEIR AMENDMENT BY THE FINANCE A CT, 2007, ALLOWING THE APPLICATION TO HAVE BEEN PROCEEDED WIT H, HAS BEEN PASSED BEFORE THE 1ST DAY OF JUNE, 2007, BUT AN ORD ER UNDER THE PROVISIONS OF SUBSECTION (4), AS THEY STOOD IMMEDIA TELY BEFORE THEIR AMENDMENT BY THE FINANCE ACT, 2007, WAS NOT PASSED BEFORE THE 1ST DAY OF JUNE, 2007, SUCH APPLICATION SHALL NOT B E ALLOWED TO BE FURTHER PROCEEDED WITH UNLESS THE ADDITIONAL TAX ON THE INCOME DISCLOSED IN SUCH APPLICATION AND THE INTEREST THER EON, IS, NOTWITHSTANDING ANY EXTENSION OF TIME ALREADY GRANT ED BY THE SETTLEMENT COMMISSION, PAID ON OR BEFORE THE 31ST D AY OF JULY, 2007. EXPLANATION IN RESPECT OF THE APPLICATIONS REFE RRED TO IN THIS SUBSECTION, THE 31ST DAY OF JULY, 2007 SHALL BE DEE MED TO BE THE DATE OF THE ORDER OF REJECTION OR ALLOWING THE APPL ICATION TO BE PROCEEDED WITH UNDER SUB-SECTION (1). ITA NO.937/AHD/2011 & 3 OTHERS 7 7. THE NEXT PROVISION IS SECTION 245(HA). IT WAS A LSO INSERTED ON 1.6.2007 WITH THE EXPLANATION APPENDED TO THIS SECTION. IT READS AS UNDER: ABATEMENT OF PROCEEDING BEFORE SETTLEMENT COMMISSI ON. 245HA. (1) WHERE (I) AN APPLICATION MADE UNDER SECTION 245C ON OR AF TER THE 1ST DAY OF JUNE, 2007 HAS BEEN REJECTED UNDER SUB-SECTION ( 1) OF SECTION 245D; OR (II) AN APPLICATION MADE UNDER SECTION 245C HAS NOT BEEN ALLOWED TO BE PROCEEDED WITH UNDER SUB-SECTION (2A) OR FURT HER PROCEEDED WITH UNDER SUB-SECTION (2D) OF SECTION 245D; OR (III) AN APPLICATION MADE UNDER SECTION 245C HAS BE EN DECLARED AS INVALID UNDER SUB-SECTION (2C) OF SECTION 245D; OR (IV) IN RESPECT OF ANY OTHER APPLICATION MADE UNDER SECTION 245C, AN ORDER UNDER SUB-SECTION (4) OF SECTION 245D HAS NOT BEEN PASSED WITHIN THE TIME OR PERIOD SPECIFIED UNDER SU B-SECTION (4A) OF SECTION 245D, THE PROCEEDINGS BEFORE THE SETTLEM ENT COMMISSION SHALL ABATE ON THE SPECIFIED DATE .. EXPLANATION FOR THE PURPOSES OF THIS SUB-SECTION, SPECIFIED DATE MEANS (A) IN RESPECT OF AN APPLICATION REFERRED TO IN CLA USE (I), THE DAY ON WHICH THE APPLICATION WAS REJECTED; (B) IN RESPECT OF AN APPLICATION REFERRED TO IN CLA USE (II), THE 31ST DAY OF JULY, 2007; (C) IN RESPECT OF AN APPLICATION REFERRED TO IN CLA USE (III), THE LAST DAY OF THE MONTH IN WHICH THE APPLICATION WAS DECLA RED INVALID; ITA NO.937/AHD/2011 & 3 OTHERS 8 (D) IN RESPECT OF AN APPLICATION REFERRED TO IN CLA USE (IV), ON THE DATE ON WHICH THE TIME OR PERIOD SPECIFIED IN SUB-S ECTION (4A) OF SECTION 245D EXPIRES. 8. SUB-CLAUSE (4) OF SECTION 245(HA) PROVIDE THE TI ME LIMIT TO PASS ASSESSMENT ORDER ALONG WITH 2 ND PROVISO TO SECTION 153(4) ARE ALSO RELEVANT IN ORDER TO CONSTRUE THE TIME LIMIT FOR AN ASSESSING OFFICER TO PASS THE ASSESSMENT ORDER, ON ABATEMENT OF SETTLEME NT PROCEEDINGS OR ITS CONCLUSION. THUS, SUB-SECTION (4) OF SECTION 245(H A) AND SECOND PROVISO TO SECTION 153(4) READS AS UNDER: ( 4) FOR THE PURPOSES OF THE TIME-LIMIT UNDER SECTION S 149, 153, 153B, 154, 155, 158BE AND 231 AND FOR THE PURPOSES OF PAYMENT OF INTEREST UNDER SECTION 243 OR 244 OR, AS THE CAS E MAY BE, SECTION 244A, FOR MAKING THE ASSESSMENT OR REASSESSMENT UND ER SUB- SECTION (2), THE PERIOD COMMENCING ON AND FROM THE DATE OF THE APPLICATION TO THE SETTLEMENT COMMISSION UNDER SECT ION 245C AND ENDING WITH 'SPECIFIED DATE' REFERRED TO IN SUB-SEC TION (1) SHALL BE EXCLUDED; AND WHERE THE ASSESSEE IS A FIRM, FOR THE PURPOSES OF THE TIME-LIMIT FOR CANCELLATION OF REGISTRATION OF THE FIRM UNDER SUB- SECTION (1) OF SECTION 186, THE PERIOD AFORESAID SH ALL, LIKEWISE, BE EXCLUDED. . PROVIDED FURTHER THAT WHERE A PROCEEDING BEFORE TH E SETTLEMENT COMMISSION ABATES UNDER SECTION 245HA, THE PERIOD O F LIMITATION AVAILABLE UNDER THIS SECTION TO THE ASSESSING OFFIC ER FOR MAKING AN ORDER OF ASSESSMENT, REASSESSMENT OR RE-COMPUTATION , AS THE CASE MAY BE, SHALL, AFTER THE EXCLUSION OF THE PERIOD UN DER SUB-SECTION (4) OF SECTION 245HA, BE NOT LESS THAN ONE YEAR; AN D WHERE SUCH PERIOD OF LIMITATION IS LESS THAN ONE YEAR, IT SHAL L BE DEEMED TO HAVE BEEN EXTENDED TO ONE YEAR; AND FOR THE PURPOSE S OF DETERMINING THE PERIOD OF LIMITATION UNDER SECTIONS 149, 153B, 154, 155, 158BE AND 231 AND FOR THE PURPOSES OF PAY MENT OF INTEREST UNDER SECTION 243 OR SECTION 244 OR, AS TH E CASE MAY BE, SECTION 244A, THIS PROVISO SHALL ALSO APPLY ACCORDI NGLY. ITA NO.937/AHD/2011 & 3 OTHERS 9 9. IT IS AN ADMITTED POSITION THAT THE LD.SETTLEMEN T COMMISSION HAS NOT PASSED ANY ORDER ON THE APPLICATIONS OF THE ASS ESSEES AFTER THE AMENDMENT CARRIED OUT BY WAY OF FINANCE ACT, 2007. THE AREA OF DISPUTE BETWEEN BOTH THE PARTIES RELATES TO VERY NA RROW COMPASS. AS PER REVENUE, THE SETTLEMENT COMMISSION WAS TO PASS AN O RDER UNDER SUB- SECTION 4 ON OR BEFORE 31.3.2008. HOWEVER, SINCE T HE REQUISITE ORDER WAS NOT PASSED BY THE LD.SETTLEMENT COMMISSION BY 31.3. 2008, THE ASSESSEES CASE WAS COVERED UNDER CLAUSE (4) OF SUB -SECTION (1) OF SECTION 245(HA) R.W.S EXPLANATION (D). ON THE OTHER HAND, THE CASE OF THE ASSESSEE IS THAT ONCE THEY FAILED TO MAKE PAYME NT OF TAXES IN TERMS OF SECTION (2D), THEIR APPLICATION WOULD DEEM TO HAVE BEEN ABATED ON 31.7.2007, BECAUSE, THEIR APPLICATION WOULD NOT BE ALLOWED TO BE PROCEEDED WITH. 10. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND G ONE THROUGH THE RECORD CAREFULLY. A BARE PERUSAL OF THE ABOVE PROVISIONS WOULD INDICATE THAT, IF THE AN ASSESSEE FILES AN APPLICATION UNDER SECTION 245C OF THE INCOME TAX ACT BEFORE SETTLEMENT COMMISSION, THEN, AS PER SECTION 245D(1), THE LD.SETTLEMENT COMMISSIONER SHALL, WITHIN SEVEN DAYS FROM THE DATE OF RECEIPT OF APPLICATION, ISSUE A NOTICE TO THE APPLICANT REQ UIRING HIM TO EXPLAIN AS TO WHY THE APPLICATION MADE BY HIM BE ALLOWED TO BE PR OCEEDED WITH. IN THE PRESENT CASE, THERE IS NO DISPUTE THAT THE LD.SETTL EMENT COMMISSION HAS TAKEN COGNIZANCE UNDER SECTION 245D IN BOTH THESE CASES, AND THE APPLICATIONS OF THE ASSESSEES WERE PROCEED WITH. CLAUSE 2(A) HAS BEEN INSERTED WITH SECTION 245D BY FINANCE ACT, 2007. THIS CLAUSE CONTEMPLATE S THAT WHERE THE APPLICATION WAS MADE UNDER SECTION 245C BEFORE THE FIRST DAY OF JUNE, 2007, BUT AN ORDER UNDER SUB-SECTION (1) OF SECTION 245D WAS NOT PASSED, I.E. THE APPLICATION WAS NOT PROCEED WITH, THEN, SUCH APPLIC ATION WILL BE DEEMED TO ITA NO.937/AHD/2011 & 3 OTHERS 10 HAVE BEEN ALLOWED TO PROCEED WITH, BUT, THE CONDITI ON IS THAT THE ADDITIONAL TAXES ON THE INCOME-TAX DISCLOSED IN SUCH APPLICATI ON OUGHT TO HAVE BEEN PAID BEFORE 31 ST DAY OF JULY, 2007. SIMILARLY, THE CLAUSE 2(D) AS EXTRACTED ABOVE HAS BEEN INSERTED WITH SECTION 245D BY FINANCE ACT, 2007. THIS CLAUSE DEAL WITH THE APPLICATIONS WHERE THE ACTION UNDER SECTIO N 245D(1) ON THE APPLICATION MOVED UNDER SECTION 245C(1) WAS ALREADY TAKEN. IN OTHER WORDS, WHERE THE SETTLEMENT COMMISSION HAS PROCEED WITH AN APPLICATION MOVED UNDER SECTION 245C, THIS CLAUSE IS RELEVANT FOR THO SE APPLICATIONS. THIS CLAUSE CONTEMPLATES THAT TAXES ALONG WITH ADDITIONAL TAXES ON THE INCOME DISCLOSED IN THE APPLICATION SHOULD BE PAID BY 31.7.2007. IN CA SE AN ASSESSEE FAILS TO MAKE PAYMENT, THEN THE APPLICATION WILL BE DEEMED TO HAV E BEEN ABATED. THE CASE OF THE REVENUE IS THAT SUB-SECTION (4) OF SECTION 2 45D CONTEMPLATES ADJUDICATION OF THE APPLICATIONS MOVED UNDER SECTIO N 245C. SUB-SECTION 4A FURTHER PROVIDES ADJUDICATION OF THIS APPLICATION. FOR THE PURPOSE OF PRESENT CONTROVERSY, THE LD.REVENUE AUTHORITIES HAVE DRAWN SUPPORT FROM SUB-SECTION 4(A) OF CLAUSE (2). ACCORDING TO THE CIT(A), THIS CLAUSE AUTHORIZES THE SETTLEMENT COMMISSION TO DECIDE APPLICATION OF THE ASSESSEE WHICH HAVE BEEN PROCEEDED WITH AS PER SECTION 245D OF SUB-SECTION ( 1) OF SECTION 245D2D. SUCH APPLICATION SHOULD HAVE BEEN DECIDED BY 31.3.2 008. IN THE PRESENT CASE, SINCE NO ORDER HAS BEEN PASSED BY THE SETTLEMENT CO MMISSION, THEREFORE, IT IS TO BE CONSTRUED THAT THE APPLICATIONS OF THE ASSESS EE HAVE ABATED ON 31.3.2008, I.E. THE TIME LIMIT PROVIDED IN SUB-SECTION-4(A). IN OUR OPINION, THIS IS THE ERRONEOUS CONSTRUCTION OF PROVISION AT THE END OF T HE LD.CIT(A). SUB-CLAUSE 4(A) IS APPLICABLE ON THOSE APPLICATIONS, WHERE THE TAXES WERE PAID BY AN ASSESSEE BEFORE 31.7.2007. IN ALL THESE APPLICATIO NS, THE ORDER OUGHT TO BE PASSED BY 31.3.2008. A PERUSAL OF THE PROVISIONS E XTRACTED (SUPRA), IT IS CLEAR THAT IN CASE WHERE TAXES WERE NOT PAID BY 31.7.2007 , THEN, THE APPLICATION WILL BE DEEMED TO HAVE BEEN ABATED ON THIS DATE. THE OR DER OF THE ITAT ITA NO.937/AHD/2011 & 3 OTHERS 11 (AMRISTAR) BENCH) HAS ALSO GIVEN THIS INTERPRETATIO N IN THE CASE OF GURMEET SINGH (SUPRA). 11. IN ORDER TO FIND OUT WHETHER THE ASSESSEES HAVE PAID TAXES BEFORE 31 ST JULY, 2007 OR NOT, WE HAVE DIRECTED THE LD.COUNSEL TO DEMONSTRATE THIS FACT. THE LD.COUNSEL FOR THE ASSESSEE FOR THE APPLICANTS BEFORE THE SETTLEMENT COMMISSIONER TRY TO DEMONSTRATE THE TAX LIABILITY A ND THE AMOUNTS PAID BY BOTH THESE ASSESSEES. HOWEVER, WE FIND THAT BOTH T HE ORDERS ARE TOTALLY SILENT ON THIS ISSUE. IF WE ARRIVE AT A CONCLUSION THAT T HE TAXES WERE NOT PAID BY THE ASSESSEE BEFORE 31.7.2007, THEN, THE APPLICATION BE FORE THE SETTLEMENT COMMISSIONER WOULD ABATE ON 31 ST JULY. BUT IF IT IS ESTABLISHED THAT TAX LIABILITY WAS DISCHARGED IN SPITE OF THAT NO SPECIF IC ORDER HAS BEEN PASSED BY THE SETTLEMENT COMMISSION, THE APPLICATION WOULD BE CONSIDERED AS ABATED ON 31.3.2008. THIS SITUATION WOULD GOAD US TO RECORD A DIFFERENT FINDING ON THE LIMITATION. IF THE APPLICATIONS ARE ABATED ON 31 ST JULY, THEN, THE ASSESSMENT ORDERS ARE TIME BARRED. BUT IF THE APPLICATIONS AR E ABATED ON 31.3.2008, THEN, THE ASSESSMENT ORDERS ARE WITHIN THE TIME LIMIT. T HEREFORE, FOR LIMITED PURPOSE, WE RESTORE THE DISPUTE TO THE FILE OF THE LD.CIT(A). THE LD.CIT(A) SHALL DETERMINE THE TAX LIABILITY ON THE BASIS OF D ISCLOSURE MADE BY BOTH THE ASSESSEES IN THE SETTLEMENT APPLICATION. AFTER DET ERMINATION OF THE TAX LIABILITY, HE WOULD FIND OUT HOW MUCH AMOUNTS HAVE BEEN PAID BY BOTH THE ASSESSEES BEFORE 31 ST JULY, 2007. AFTER CONCLUSIVELY ARRIVING ON THE FI GURES OF BOTH THESE ASPECTS, SHE WOULD DECIDE WHETHER THE AS SESSMENT ORDERS SHOULD BE TERMED AS TIME BARRED OR NOT. 12. IN VIEW OF THE ABOVE DISCUSSION, WE ALLOW BOTH THE APPEALS OF THE ASSESSEES FOR STATISTICAL PURPOSE. ITA NO.937/AHD/2011 & 3 OTHERS 12 13. THE OBSERVATIONS MADE BY US WILL NOT IMPAIR OR INJURE THE CASE OF THE AO AND WILL NOT CAUSE ANY PREJUDICE TO THE DEFENCE/ EXPLANATION OF THE ASSESSEE. 14. AS FAR AS OTHER TWO APPEALS ARE CONCERNED, THES E APPEALS ARE DEPENDED UPON THE STATUS OF THE ASSESSMENT ORDER. IF THE AS SESSMENT ORDERS ARE NOT SUSTAINABLE FOR THE REASONS THEY ARE PASSED AFTER E XPIRY OF LIMITATION, THEN, NO LIABILITY WOULD BE THERE UPON THE ASSESSEE, AND THE SE ISSUES FOR THE CURRENT YEARS WOULD BE ACADEMIC. THEREFORE, WE SET ASIDE T HE IMPUGNED ORDERS IN THESE TWO APPEALS ALSO, AND RESTORE THE ISSUES TO T HE FILE OF THE LD.CIT(A) FOR RE-ADJUDICATION AFTER THE DECISION TAKEN ON THE STA TUS OF THE ASSESSMENT ORDERS. 15. IN THE RESULT, ALL THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT ON 1 ST JUNE, 2016 AT AHMEDABAD. SD/- SD/- ( N.K. BILLAIYA ) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 01/06/2016