Sh. Gurmit Singh, Bathinda V. The Dy. Commissioner of Income-tax, Ludhiana

ITSSA 1/ASR/2011

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 0158 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 11 month(s) 4 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 30-07-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 17-07-2014
• Assessment Year: misc
• Appeal Filed On: 26-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure; Period of limitation; Validity of assessment; Block assessment; Cancellation of registration
• Section: 244A; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER IT(SS) A.NO.01(ASR)/201 BLOCK PERIOD: 01.04.1990 TO 29.11.2000 PAN :ACPPS8364J SH.GURMEET SINGH PROP. VS. DY.COMMR. OF INCOME TA X, M/S. D.B. FILLING STATION, CC-II, LUDHIANA. BATHINDA. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. ASHWANI KUMAR, CA RESPONDENT BY:SH. TARSEM LAL, DR DATE OF HEARING:17/07/2014 DATE OF PRONOUNCEMENT:30/07/2014 ORDER PER B.P.JAIN, AM ; THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER OF THE CIT(A)-1, LUDHIANA DATED 01/07/2011 FOR THE BLOCK PERIOD 01. 04.1990 TO 29.11.2000. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL : 1. THAT THE ORDER PASSED U/S 250(6) OF THE INCOME TAX ACT, 1961 BY THE LD. CIT(A)-1, LUDHIANA IS AGAINST LAW AND FA CTS ON THE FILE IN AS MUCH AS THE LD. CIT(A) WAS NOT JUSTIFIED TO ARBITRARILY HOLD THAT THE ASSESSMENT COMPLETED BY THE LD. ASSES SING OFFICER WAS NOT BARRED BY TIME. ITA NO.01(ASR)/2011 2 2. THAT THE LD. CIT(A) FURTHER GRAVELY ERRED IN UPHOLD ING THE VALIDITY OF ASSESSMENT FRAMED U/S 158BC READ WITH SEC. 158BD . 3. THAT HE WAS NOT JUSTIFIED TO HOLD THAT THE INSUFFIC IENCY WITH REGARD TO THE ISSUANCE OF NOTICE U/S 158BD COULD BE OVER C OME BY PROVISIONS OF SECTION 292BB. 4. THAT HE WAS NOT JUSTIFIED TO UPHOLD THE COMPLETION OF BLOCK ASSESSMENT AND DETERMINATION OF UN-DISCLOSED INCOME FOR VARIOUS YEARS AT RS.27,73,230/-. 2. THE LD. COUNSEL FOR THE ASSESSEE, MR. ASHWANI KU MAR, CA ARGUED AT THE OUTSET TO DECIDE GROUND NO.1 WITH REGARD TO THE ASSESSMENT BEING TIME BARRED AND ACCORDINGLY, HE PROCEEDED TO ARGUE THE I SSUE WITH REGARD TO GROUND NO.1. THE LD. COUNSEL FOR THE ASSESSEE, MR. ASHWANI KUMAR ARGUED THAT THE BRIEF FACTS OF THE CASE ARE THAT THE ASSES SEE IS THE PROPRIETOR OF THE PETROL PUMP AND THERE WAS NO SEARCH AND SEIZURE OPE RATIONS ON THE APPLICANT BUT THE SEARCH WAS MADE ON THE PREMISES OF SH. RAJ KUMAR ACCOUNTANT AND AS PER PARA-14 OF THE ORDER, SOME DOCUMENTS PERTAIN ING TO THE ASSESSEE WERE SEIZED AND ON THE BASIS OF THAT THE PROCEEDINGS U/S 158BD WERE INITIATED AGAINST THE ASSESSEE. AS PER PARA 3 OF THE ORDER, T HE ASSESSEE FILED AN APPLICATION BEFORE THE SETTLEMENT COMMISSION ON 07. 06.2002 FOR THE BLOCK PERIOD AND FOR REGULAR ASSESSMENT FOR A.Y. 2001-02 AND THE SETTLEMENT COMMISSION PASSED THE ORDER U/S 245D(1) AND THAT A PPLICATION WAS ALLOWED TO BE PROCEEDED WITH AND THEREAFTER, SINCE THE ASSE SSEE DID NOT PAY THE ITA NO.01(ASR)/2011 3 ADMITTED TAX, THE PROCEEDINGS IN THIS CASE ABATED O N 31.07.2007. HE FURTHER STATED THAT THERE HAS BEEN AMENDMENT BY THE FINANCE ACT, 2007 W.E.F. 01.06.2007 WHEREIN NEW PROVISION I.E. (2D) WAS INSE RTED WHICH IS BEING REPRODUCED AS UNDER: WHERE AN APPLICATION WAS MADE UNDER SUB-SECTION (1 ) OF SECTION 245C BEFORE THE 1ST DAY OF JUNE, 2007 AND AN ORDER UNDE R THE PROVISIONS OF SUB-SECTION (1) OF THIS SECTION, AS T HEY STOOD IMMEDIATELY BEFORE THEIR AMENDMENT BY THE FINANCE ACT, 2007, AL LOWING THE APPLICATION TO HAVE BEEN PROCEEDED WITH, HAS BEEN P ASSED BEFORE THE 1ST DAY OF JUNE, 2007, BUT AN ORDER UNDER THE PROVI SIONS OF SUB- SECTION (4), AS THEY STOOD IMMEDIATELY BEFORE THEIR AMENDMENT BY THE FINANCE ACT, 2007, WAS NOT PASSED BEFORE THE 1ST DA Y OF JUNE, 2007, SUCH APPLICATION SHALL NOT BE ALLOWED TO BE FURTHER PROCEEDED WITH UNLESS THE ADDITIONAL TAX ON THE INCOME DISCLOSED I N SUCH APPLICATION AND THE INTEREST THEREON, IS, NOTWITHSTANDING ANY E XTENSION OF TIME ALREADY GRANTED BY THE SETTLEMENT COMMISSION, PAID ON OR BEFORE THE 31ST DAY OF JULY, 2007. HE FURTHER STATED THAT ALONGWITH IT, AN EXPLANATION HAD ALSO BEEN INSERTED THEREIN WHICH READS AS UNDER: EXPLANATION IN RESPECT OF THE APPLICATIONS REFER RED TO IN THIS SUB- SECTION, THE 31 ST DAY OF JULY, 2007 SHALL BE DEEMED TO BE THE DATE O F THE ORDER OF REJECTION OR ALLOWING THE APPLICATION TO B E PROCEEDED WITH UNDER SUB-SECTION (1). ITA NO.01(ASR)/2011 4 HE FURTHER STATED THAT SECTION 245HA WAS ALSO INSER TED W.E.F. 1.6.2007 WHICH IS ALSO REPRODUCED AS UNDER: ABATEMENT OF PROCEEDING BEFORE SETTLEMENT COMMISSIO N. 245HA. (1) WHERE ( I ) AN APPLICATION MADE UNDER SECTION 245C ON OR AFTER 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 FURTHER PROCEEDED WITH UNDER SUB-SECTION (2D) OF SECTION 245D ; OR ( III ) AN APPLICATION MADE UNDER SECTION 245C HAS BEEN 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 SUB-SECTI ON (4A) OF SECTION 245D , THE PROCEEDINGS BEFORE THE SETTLEMENT COMMISSION SH ALL ABATE ON THE SPECIFIED DATE 2.1. THE LD. COUNSEL FURTHER STATED THAT THERE ARE FOUR CONDITIONS ON THE BASIS OF WHICH, THE APPLICATION STOOD ABATED AND FO R EACH ONE OF THE CASES, THE SPECIFIED DATE HAD BEEN LAID DOWN IN THE EXPLAN ATION TO SECTION 245HA WHICH READS AS UNDER: EXPLANATION FOR THE PURPOSES OF THIS SUB-SECTION , SPECIFIED DATE MEANS - ( A ) IN RESPECT OF AN APPLICATION REFERRED TO IN CLAU SE ( I ), THE DAY ON WHICH THE APPLICATION WAS REJECTED; ITA NO.01(ASR)/2011 5 ( B ) IN RESPECT OF AN APPLICATION REFERRED TO IN CLAU SE ( II ), THE 31ST DAY OF JULY, 2007; ( C ) IN RESPECT OF AN APPLICATION REFERRED TO IN CLAU SE ( III ), THE LAST DAY OF THE MONTH IN WHICH THE APPLICATION WAS DECLARED INVALID; ( D ) IN RESPECT OF AN APPLICATION REFERRED TO IN CLAU SE ( IV ), ON THE DATE ON WHICH THE TIME OR PERIOD SPECIFIED IN SUB-SECTIO N (4A) OF SECTION 245D EXPIRES. 2.2. HE FURTHER STATED THE ABOVE TWO SECTIONS ARE R EQUIRED TO BE EXAMINED VIS--VIS THE GROUNDS AS TAKEN BY THE ASSESSEE THAT ASSESSMENT AS FRAMED BY THE AO IS BARRED BY TIME. THE AMENDED SECTION 245D( 2D) MADE IT OBLIGATORY FOR THE APPLICANT TO PAY THE ADDITIONAL TAX ON THE INCOME DISCLOSED IN THE SETTLEMENT APPLICATION ON OR BEFORE 31 ST OF JULY, 2007, SO THAT THE APPLICATION COULD BE PROCEEDED FURTHER FOR FINAL ADJUDICATION. HOWEVER, AT THE TIME WHEN THE PAYMENT OF TAX WAS TO BE MADE, DUE TO CHANGE OF POLICIES OF LIQUOR, THE BUSINESS OF THE GROUP HAD TO BE CLOSED ABRUPTLY AND , AS SUCH, FULL PAYMENT OF TAX ALONG WITH INTEREST COULD NOT BE MADE. THEREFOR E, DUE TO THE NON- PAYMENT OF TAXES, THE APPLICATION OF THE ASSESSEE STOOD ABATED ON 31 ST OF JULY, 2007, WHICH IS CLEAR FROM SECTION 245(2D) REA D WITH CLAUSE (II) OF SECTION 245HA AND EXPLANATION (B) OF SECTION 245H A WHERE THE SPECIFIED DATE HAS BEEN DEFINED. THE ABOVE SECTION MAKES THE THINGS ABSOLUTELY CLEAR THAT IN CASE, WHERE THE COMPLETE PAYMENT OF TAX AND INTEREST ON THE AMOUNT DISCLOSED BEFORE THE SETTLEMENT COMMISSION HAS NOT BEEN MADE, THEN THE ITA NO.01(ASR)/2011 6 APPLICATION OF THE ASSESSEE STOOD ABATED ON 31 ST JULY, 2007 AND NO FURTHER ORDER WAS REQUIRED TO BE PASSED BY THE SETTLEMENT C OMMISSION AND THE USE OF WORD SHALL AND DEFINING OF SPECIFIED DATE FO R THE PURPOSES OF ADJUDICATION MAKES THE THING ABSOLUTELY CLEAR AND L EAVES NO AMBIGUITY. THESE ARE STATUTORY PROVISIONS AND THERE CANNOT BE ANY EXTENSION OF THE DATE IN VIEW OF THE STATUTORY PROVISIONS WHICH HAVE BEEN LAID DOWN IN THE ACT. THE PROVISIONS OF THE STATUTE ARE VERY CLEAR AND T HERE IS NO AMBIGUITY ABOUT THE SAME AND THE USE OF WORD SHALL IN 245(2D) REA D WITH EXPLANATION TO SECTION 245D(2A), WHICH LAYS DOWN THAT W.E.F. 31 ST OF JULY, 2007, IT SHALL BE DEEMED THE DATE OF ORDER OF REJECTION OR ALLOWING THE APPLICATION TO BE PROCEEDED WITH AND ALSO EXPLANATION TO SECTION 245H A, WHERE THE SPECIFIED DATE HAS BEEN DEFINED WITH REFERENCE TO EACH EVENT UALITY LEAVE, NO ROOM FOR DOUBT AT ALL THAT THE PRESENT ASSESSMENT AS FRAMED IS BARRED BY TIME AND DESERVES TO BE QUASHED. CLAUSE (2), (3) AND (4) OF EXPLANATION TO SECTION 245HA LAYS DOWN THE PROCEDURE FOR COMPLETION OF ASS ESSMENT WITHIN THE STIPULATED TIME AND CLAUSE (4) OF EXPLANATION TO SE CTION 245HA READS AS UNDER: (4) FOR THE PURPOSES OF THE TIME-LIMIT UNDER SECTI ONS 149 , 153 , 153B , 154 , 155 , 158BE AND 231 AND FOR THE PURPOSES OF PAYMENT OF INTEREST UNDER SECTION 243 OR 244 OR, AS THE CASE MAY BE, SECTION 244A , FOR MAKING THE ASSESSMENT OR REASSESSMENT UNDER SUB-SEC TION (2), THE PERIOD COMMENCING ON AND FROM THE DATE OF THE APPLI CATION TO THE SETTLEMENT COMMISSION UNDER SECTION 245C AND ENDING WITH ITA NO.01(ASR)/2011 7 'SPECIFIED DATE' REFERRED TO IN SUB-SECTION (1) SHA LL BE EXCLUDED; AND WHERE THE ASSESSEE IS A FIRM, FOR THE PURPOSES OF T HE TIME-LIMIT FOR CANCELLATION OF REGISTRATION OF THE FIRM UNDER SUB- SECTION (1) OF SECTION 186, THE PERIOD AFORESAID SHALL, LIKEWISE, BE EXCLU DED. 2.3. THE LD. COUNSEL FOR THE ASSESSEE INVITED OUR ATTENTION TO 2 ND PROVISO TO SECTION 153(4) AS AMENDED BY THE FINANCE ACT, 2008 W.E.F. 01.06.2007 WHICH READS AS UNDER: PROVIDED FURTHER THAT WHERE A PROCEEDING BEFORE THE SETTLEMENT COMMISSION ABATES UNDER SECTION 245HA , THE PERIOD OF 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 UNDER SUB-SECTION (4) OF SECTION 245HA , BE NOT LESS THAN ONE YEAR; AND WHERE SUCH PERIOD OF LIMITATION IS LESS THAN ONE YEAR, IT SHALL BE DEEME D TO HAVE BEEN EXTENDED TO ONE YEAR; AND FOR THE PURPOSES OF DETER MINING THE PERIOD OF LIMITATION UNDER SECTIONS 149 , 153B , 154 , 155 , 158BE AND 231 AND FOR THE PURPOSES OF PAYMENT OF INTEREST UNDER SECTION 243 OR SECTION 244 OR, AS THE CASE MAY BE, SECTION 244A , THIS PROVISO SHALL ALSO APPLY ACCORDINGLY. HE FURTHER STATED THAT BY GOING THROUGH THIS PROVIS O, THE A.O. WAS LEGALLY BOUND TO COMPLETE THE PENDING ASSESSMENT AFTER 31 ST OF JULY, 2007 BUT BEFORE 31 ST OF JULY, 2008. THE A.O. HAVING FAILED TO COMPLETE THE ASSESSMENT WITHIN THE PERIOD OF LIMITATION AND, THEREFORE, THE ASSESS MENT AS FRAMED BY THE A.O. ON 31 ST MARCH, 2009 IS CLEARLY BARRED BY TIME AND DESERVES TO BE QUASHED. THE LD. COUNSEL FURTHER STATED THAT IN VIEW OF THE EXPRESS PROVISIONS OF LAW AS LAID DOWN U/S 245D(2D) AND SECTION 245HA(1)(II) READ WITH EXPLANATION (B) TO THAT SECTION, IN CASES WHERE THE ADDITIONAL TAX ALONG WITH INTEREST HAVE ITA NO.01(ASR)/2011 8 NOT BEEN PAID, BEFORE 31 ST OF JULY, 2007, THE PROCEEDINGS BEFORE THE SETTLEMENT COMMISSION STOOD ABATED ON 31.7.2007. TH US, THE DATE 31.07.2007 WAS SPECIFIED BY THE STATUTE ITSELF AND LEAVES NO DOUBT ABOUT THE SAME. ONCE THE PROCEEDINGS BEFORE THE INCOME TAX SE TTLEMENT COMMISSION HAD ABATED ON 31.7.2007, IT WAS LEGALLY NOT EXPECTE D TO PASS ANY FURTHER ORDER AFTER 31.7.2007 SINCE BY THE OPERATION OF THE STATUTE ITSELF THE CASE GOT ABATED ON 31 ST JULY, 2007 AND AS SUCH ORDER BY THE AO HAD TO BE PASSED ON OR BEFORE 31 ST JULY, 2008. THIS IS MORE SO BECAUSE THE A.O. IS NO T COMPETENT AND NOT LEGALLY PERMITTED TO CHANGE THE SPECIFIED T IME OF 31 ST OF JULY, 2007 TO ANY OTHER DATE. THUS, THE ORDER AS PASSED BY THE A. O. IS NULL, VOID AND VOID ABINITIO BECAUSE AFTER THE CASE GOT ABATED BY THE E XPRESS STATUTORY PROVISIONS AND CONSEQUENTLY THE TIME LIMITATION HAVE ALSO BEEN SPECIFIED AS PER 2 ND PROVISO TO SECTION 153(4) AS AMENDED BY THE FINANCE ACT, 2008 W.E.F. 01.06.2007 AND THEREFORE, THE ASSESSMENT AS FRAMED BY THE AO IS BARRED BY TIME. EVEN OTHERWISE, BY VIRTUE OF AMENDMENT W.E.F. 1.6.2007, WITH PARTICULAR REFERENCE TO SECTION 245D(2D, IT MADE OB LIGATORY UPON THE PETITIONER TO PAY THE ADDITIONAL TAX ON THE INCOME DISCLOSED BEFORE THE SETTLEMENT COMMISSION ON OR BEFORE 31 ST OF JULY, 2008 SO THAT THE APPLICATION COULD BE PROCEEDED FURTHER FOR THAT ADJ UDICATION. HOWEVER, DUE TO THE CIRCUMSTANCES BEYOND THE CONTROL OF THE ASS ESSEE, THE PAYMENT OF ITA NO.01(ASR)/2011 9 TAXES COULD NOT BE MADE AND THEREFORE, THE APPLICAT ION OF THE ASSESSEE STOOD ABATED W.E.F. 31 ST DAY OF JULY, 2007 AND AS PER 2 ND PROVISO TO SECTION 153 (4), THE A.O. WAS BOUND TO FRAME THE ASSESSMENT UPTO 31 ST OF JULY, 2008 AND WHICH HE HAVING FAILED TO DO SO, THE ASSESSMENT IS CLEARLY BARRED BY TIME. ALSO, IN THE PRESENT CASE, THE JURISDICTION OF THE INCOME TAX SETTLEMENT COMMISSION EXPIRED ON SPECIFIED DATE, WHICH HAS B EEN DEFINED IN EXPLANATION (B) TO SECTION 245HA AND THE CASE STOOD ABATED AND, IN VIEW OF THE ABOVE SAID FACTS AND CIRCUMSTANCES, ANY SUBSEQU ENT ISSUANCE OF NOTICES U/S 143(2) BY THE A.O. ARE CLEARLY BARRED BY TIME. 3. THE LD. DR, MR. TARSEM L:AL, ON THE OTHER HAND, RELIED UPON THE ORDER OF THE CIT(A) AND THE REMAND REPORT OF THE A. O. AVAILABLE AT PAGES 3 & 4 OF THE ORDER OF THE LD. CIT(A). THE RELEVANT PAR A OF THE SAID REMAND REPORT IS REPRODUCED FOR THE SAKE OF CONVENIENCE, AS UNDE R: A) THE ASSESSEE FILED AN APPLICATION U/S 245C OF TH E I.T.ACT BEFORE HONBLE SETTLEMENT COMMISSION (APPLICATION NO.9/35/ 2002/1-IT ON 07.06.2002 FOR THE BLOCK PERIOD 01.04.90 TO 29.11.2 000 AND REGULAR ASSESSMENT FOR A.Y. 2001-02. THE HONBLE SETTLEMENT COMMISSION PASSED AN ORDER U/S 245D(1) OF THE I.T.ACT, 1961 A ND ALLOWED THE APPLICATON OF THE ASSESSEE TO BE PROCEEDED WITH. LA TER ON THE PROVISIONS OF SECTION 245D WERE AMENDED W.E.F. 01.0 6.2007 AND SUB- SECTION (2D) WAS INSERTED 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 UNDE R THE PROVISIONS OF SUB-SECTION (1) OF THIS SECTION, AS T HEY STOOD IMMEDIATELY BEFORE THEIR AMENDMENT BY THE FINANCE ACT, 2007, AL LOWING THE APPLICATION TO HAVE BEEN PROCEEDED WITH, HAS BEEN P ASSED BEFORE THE 1ST DAY OF JUNE, 2007, BUT AN ORDER UNDER THE PROVI SIONS OF SUB- ITA NO.01(ASR)/2011 10 SECTION (4), AS THEY STOOD IMMEDIATELY BEFORE THEIR AMENDMENT BY THE FINANCE ACT, 2007, WAS NOT PASSED BEFORE THE 1ST DA Y OF JUNE, 2007, SUCH APPLICATION SHALL NOT BE ALLOWED TO BE FURTHER PROCEEDED WITH UNLESS THE ADDITIONAL TAX ON THE INCOME DISCLOSED I N SUCH APPLICATION AND THE INTEREST THEREON, IS, NOTWITHSTANDING ANY E XTENSION OF TIME ALREADY GRANTED BY THE SETTLEMENT COMMISSION, PAID ON OR BEFORE THE 31ST DAY OF JULY, 2007. FURTHER SUB-SECTION 4(A) WAS ALSO INSERTED W.E.F. 0 1.06.,2007 WHICH READS AS UNDER: I) IN RESPECT OF AN APPLICATION REFERRED TO IN SUB-SEC TION (2A) OR SUB-SECTION (2D), ON OR BEFORE THE 31 ST DAY OF MARCH, 2008. II) IN RESPECT OF AN APPLICATION MADE ON OR AFTER THE I ST DAY OF JUNE, 2007, WITHIN TWELVE MONTHS FROM THE END OF TH E MONTH IN WHICH THE APPLICATION WAS MADE. IN VIEW OF THESE PROVISIONS AS NO ORDER OF THE HON BLE SETTLEMENT COMMISSION WAS RECEIVED, THE PROCEEDINGS IN THIS CA SE ABATED ON 31.03.2008 AS PER PROVISIONS OF SECTION 245HA(IV) I NSERTED BY FINANCE ACT, 2007 READ WITH EXPLANATION (D) THERETO W.E.F. 01.06.2007. ACCORDINGLY, ASSESSMENT WAS COMPLETED IN THIS CASE ON 31.03.2009. 4. THE LD. CIT(A) VIDE PARA 6 OF HIS ORDER DISMISSE D THE GROUNDS OF THE ASSESSEE ON THE ISSUE AND THE RELEVANT ORDER OF TH E LD. CIT(A) IN PARA 6 IS REPRODUCED FOR THE SAKE OF CONVENIENCE AS UNDER: 6. I HAVE CONSIDERED THE ISSUE RAISED BY THE APPELL ANT AND THE COMMENTS OF THE A.O. ON THE SAME, IT IS CLEAR THAT THE FACTS OF THE CASE UNDER CONSIDERATION FALL UNDER SUB-SECTION 245HA(1) (IV) AS THE CASE OF THE APPELLANT HAD BEEN DULY ADMITTED BY THE HON BLE SETTLEMENT COMMISSION BUT NO ORDER U/S 245D(IV) COULD BE PASSE D AND THE SPECIFIED DATE IN RESPECT OF THIS CATEGORY OF CASES IS AS PER CLAUSE D OF EXPLANATION TO S 245HA, WHICH READS AS UNDER: ITA NO.01(ASR)/2011 11 IN RESPECT OF AN APPLICATION REFERRED TO CLAUSE IV ON THE DATE ON WHICH THE TIME OR PERIOD SPECIFIED IN SUB-SECTION 4 A OF S. 245D EXPIRES. IT, THEREFORE, BECOMES ABUNDANTLY CLEAR THAT THE CL AIM OF THE AR ON THIS ISSUE IS NOT WARRANTED BY THE PROVISIONS OF LA W AS HIGHLIGHTED ABOVE. AS SUCH THIS GROUND OF APPEAL IS DISMISSED. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. AS ARGUED BY THE LD. COUNSEL FOR THE ASSESSEE, WHO READ OUT THE PROVISION OF SECTION 245D(2D), WHICH HAS BEEN REPRODUCED HEREINA BOVE. THE APPLICATION UNDER SECTION 245C(1) HAS BEEN MADE BEFORE IST DAY OF JUNE, 2007 AND THE APPLICATION WAS ALLOWED TO HAVE BEEN PROCEEDED WITH , BEFORE THE IST DAY OF JUNE, 2007 AND NO ORDER UNDER SUB-SECTION (4) WAS P ASSED BEFORE THE IST DAY OF JUNE, 2007 AND AS PER PROVISIONS OF SECTION 245D (2D), SUCH APPLICATION SHALL NOT BE ALLOWED TO BE FURTHER PROCEEDED WITH UNLESS THE ADDITIONAL TAX ON THE INCOME DISCLOSED IN SUCH APPLICATION AND THE INTEREST THEREON IS PAID ON OR BEFORE THE 31 ST DAY OF JULY, 2007. THERE IS NO DISPUTE TO THE FAC T THAT NO TAX HAS BEEN PAID ON OR BEFORE 31 ST DAY OF JULY, 2007 AND THEREFORE, THE APPLICATION WAS NOT TO BE ALLOWED TO BE FURTHER PRO CEEDED WITH AND THEREFORE, WHETHER THE PROCEEDINGS BEFORE THE SETTLEMENT COMMI SSION HAVE BEEN ABATED IN VIEW OF SECTION 245HA(1)(II) READ WITH EX PLANATION (B) ON 31 ST DAY OF JULY, 2007. WHETHER THE APPLICATION BEFORE THE SETTLEMENT COMMISSION BECOMES REDUNDANT IN SUCH CIRCUMSTANCES ON 31 ST JULY, 2007 BEING THE SPECIFIED DATE. ITA NO.01(ASR)/2011 12 AS PER THE LD. COUNSEL FOR THE ASSESSEE UNLESS SET TLEMENT COMMISSION CAN PROCEED WITH, THE APPLICATION UNDER SECTION 245D(2D ) AFTER 31 ST JULY, 2007 CANNOT BE ADJUDICATED AND THERE IS NO OCCASION FOR THE SETTLEMENT COMMISSION TO PASS AN ORDER UNDER SECTION 245D(4) OF THE ACT AND THE PROVISIONS OF SECTION 245D(4) READ WITH SECTION 245 D(4A) SHALL NOT BE APPLICABLE AND THE PROCEEDINGS OF THE ASSESSMENT GE TS REVIVED AS AT THE SPECIFIED DATE I.E. ON 31 ST JULY, 2007 AND NOT ON 31 ST MARCH, 2008. THE LD. COUNSEL FOR THE ASSESSEE ALSO EQUATED THE PROVISION S CONTAINED IN SECTION 245D(2A) READ WITH EXPLANATION WHICH ARE PARI MATER IA TO SECTION 245D(2D) OF THE ACT. 5.1. AS REGARDS THE CASE OF REVENUE, THE LD. DR, MR . TARSEM LAL ARGUED THAT EVEN NO TAXES HAVE BEEN PAID, SETTLEMENT COMMI SSION IS REQUIRED TO PASS AN ORDER U/S 245D(4) READ WITH SEC.245D(4A)(I ) OF THE ACT I.E. BEFORE 31 ST MARCH, 2008 AND PROVISIONS OF SECTION 245HA(I)(IV) SHALL BE APPLICABLE WHICH SPECIFICALLY SPEAKS WHERE NO ORDER UNDER SEC TION 245D(4) HAS BEEN PASSED WITHIN TIME OR PERIOD SPECIFIED UNDER SECTIO N 245D(4A) THEN EXPLANATION (D) TO SECTION 245HA(1) READ WITH SECT ION 245D(4A) SHALL APPLY WHERE THE SETTLEMENT COMMISSION IS REQUIRED TO PASS THE ORDER BY 31 ST DAY OF MARCH 2008 AND IT IS ONLY ON 31 ST MARCH, 2008 THE PROCEEDINGS BEFORE THE SETTLEMENT COMMISSION CAN ABATE WHEN NO TAXES HAVING BEEN ITA NO.01(ASR)/2011 13 PAID OR NO ORDER HAVING BEEN PASSED BY THE SETTLEME NT COMMISSION AND THE ASSESSMENT PROCEEDINGS ARE REVIVED W.E.F. 01.04.200 8 ONLY AND NOT BEFORE THAT I.E. 31.07.2007 AS ARGUED BY THE LD. COUNSEL FOR THE ASSESSEE. HE FURTHER ARGUED HOW COULD AO ASSUME JURISDICTION UN LESS HE KNOWS THE STATUS OF THE TAXES PAID. HE ALSO ARGUED THAT THE P ROVISIONS OF SECTION 245D(2A) AND EXPLANATION ARE ON DIFFERENT DOMAIN, RATHER SECTION SPEAKS OF ABATEMENT IN SUCH A CASE ON 31 ST MARCH, 2008 OF THE PROCEEDINGS BEFORE THE SETTLEMENT COMMISSION. ACCORDINGLY, HE SUPPORTED TH E ORDER OF THE LD. CIT(A) AND PRAYED TO DISMISS THE LEGAL GROUND RAISE D BY THE ASSESSEE. 5.2. ON PERUSAL OF FACTS, THE CONTROVERSY BEFORE US , IN SHORT, AS ARGUED BY THE LD. COUNSEL FOR THE ASSESSEE IS THAT THE PROVIS IONS OF SECTION 245D(2D) SHALL BE APPLICABLE READ WITH SECTION 245HA(1)(II) EXPLANATION (B), WHEREAS THE REVENUE HAS STATED THAT THE PROVISIONS OF SECTI ON 245D(4) READ WITH SECTION 245D(4A)(I) AND SECTION 245HA(1)(IV) READ W ITH EXPLANATION (D) SHALL APPLY. 5.3. (I) AS REGARDS THE CASE OF REVENUE, AS PER SEC TION 245D(4A), THE SETTLEMENT COMMISSION HAS TO PASS AN ORDER U/S 245 D(4) ON OR BEFORE 31 ST DAY OF MARCH, 2008 IN RESPECT OF AN APPLICATION REF ERRED TO IN SECTION 245D(2D) AS IN THE PRESENT CASE AND THE SECTION REF ERRED TO AND RELIED UPON BY LD. COUNSEL FOR THE ASSESSEE. THE PASSING OF THE ORDER U/S 245D(4) READ ITA NO.01(ASR)/2011 14 WITH SECTION 245D(4A)(I) IS MANDATORY ON THE SETTLE MENT COMMISSION SINCE STATUTE HAS USED THE WORD SHALL IN SECTION 245D(4 A). II) IN SUCH CASES, THE ABATEMENT OF THE PROCE EDINGS BEFORE SETTLEMENT COMMISSION ARE COVERED U/S 245HA(1)IV) READ WITH EX PLANATION (D), ACCORDING TO WHICH THE ABATEMENT OF THE PROCEEDING S SHOULD BE 31.03.2008 AS REFERRED IN SECTION 245D(4A)(I) READ WITH SECTIO N 245D (4) AND THE AO IS REQUIRED TO PASS THE ORDER BY 31.03.2009, WHICH IN FACT HAS BEEN PASSED ON 31.03.2009. 5.4. NOW WE PERUSE THE CASE OF ASSESSEE, AS ALREADY DISCUSSED IN PARAS HEREINABOVE, THAT SUCH APPRECIATIONS BEFORE THE SET TLEMENT COMMISSION SHALL NOT BE ALLOWED TO BE PROCEEDED WITH UNLESS THE ADDI TIONAL TAX ON THE INCOME DISCLOSED IN SUCH APPLICATION AND THE INTEREST THER EON IS NOT PAID ON OR BEFORE 31 ST DAY OF JULY, 2007. IN THE PRESENT CASE, TAXES AND INTEREST THEREON HAVE NOT BEEN PAID ON OR BEFORE 31 ST DAY OF JULY, 2007. IN SUCH CASES, THE ABATEMENT OF PROCEEDINGS BEFORE SETTLEMENT COMMISSI ON IS COVERED U/S 245HA(1)(II) READ WITH EXPLANATION (B) BEING THE S PECIFIED DATE I.E. 31 ST DAY OF JULY, 2007. THEREFORE, THE ASSESSEE IN THE PRESE NT CASE IS COVERED U/S 245HA(1)(II) AND THEREFORE, THE PROCEEDINGS BEFORE THE SETTLEMENT COMMISSION SHALL ABATE ON THE SPECIFIED DATE AS R EFERRED TO IN EXPLANATION (B) I.E. 31 ST DAY OF JULY, 2007. IN OUR VIEW ONCE THE PROCEEDING S BEFORE THE ITA NO.01(ASR)/2011 15 SETTLEMENT COMMISSION ARE ABATED ON 31 ST JULY, 2007 THEN THERE CANNOT BE ANY OCCASION FOR THE SETTLEMENT COMMISSION TO PASS ANY ORDER U/S 245D(4) READ WITH SECTION 245(4A)(I). ALSO THE PROCEEDINGS WHICH HAVE BEEN ABATED ONCE, WHICH IS THE CASE OF ASSESSEE I.E. ON 31 ST DAY OF JULY, 2007 CANNOT AGAIN ABATE ON A LATER DATE I.E. ON 31.03.2008 WHICH IS T HE CASE OF REVENUE. THE ACT IS SILENT ON SUCH A SITUATION. TO RESOLVE THE CONTR OVERSY, THE INTERPRETATION WHICH FAVOURS THE ASSESSEE, HAS TO BE ADOPTED AND A CCORDINGLY THE PROCEEDINGS IN THE PRESENT CASE BEFORE THE SETTLEM ENT COMMISSION GET ABATED ON 31.03.2007 AND THE PROCEEDINGS BEFORE THE AO GET REVIVED ON 01.08.2007. THEREFORE, THE AO WAS REQUIRED TO PASS THE ASSESSMENT ORDER BY 31.07.2008, WHICH IN FACT HAS BEEN PASSED ON 31.03 .2009 AND THEREFORE, THE ASSESSMENT BY THE AO FOR THE IMPUGNED BLOCK PERIOD IS BARRED BY LIMITATION. THEREFORE, THE ASSESSMENT SO MADE IS BAD IN LAW AND THE ORDER OF LD. CIT(A) IS REVERSED ON THE ISSUE. THEREFORE, GROUND NO.1 OF THE ASSESSEE IS ALLOWED. 6. IN VIEW OF OUR DECISION IN FAVOUR OF THE ASSESSE E IN GROUND NO.1, THE ISSUE CONTAINED IN GROUNDS NO. 2, 3 & 4 ON MERIT AR E LEFT FOR ACADEMIC PURPOSES AND ARE NOT DECIDED SINCE THE LEGAL ISSUE IN GROUND NO.1 HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE. THUS, THE APPEAL OF THE ASSESSEE IS ALLOWED. ITA NO.01(ASR)/2011 16 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IN ITA NO. 01(ASR)/23011 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30TH JULY, 2014. SD/- SD/- (A.D.JAIN) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 30TH JULY, 2014 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH. GURMIT SINGH PROP. M/S. D.B. FILLI NG STATION, BATHINDA. 2. THE DCIT, CC-II, LUDHIANA. 3. THE CIT(A)-1, LUDHIANA 4. THE CIT, LUDHIANA. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR