SHRI BHAWARLAL JAIN,,CHENNAI vs. DCIT, CENTRAL CIRCLE - II (5),, CHENNAI

ITSSA 3/CHNY/2019Status: DisposedITAT Chennai08 March 202426 pages
AI SummaryAllowed

What were the facts?

The assessee, Shri Bhawarlal Jain, is an individual engaged in the wholesale gold jewellery business. A search and seizure operation under Section 132 of the Income Tax Act, 1961 (the Act) was conducted on his premises on December 28, 2001, covering a block period from April 1, 1995, to December 28, 2001. An initial assessment order was passed on February 24, 2005. The Commissioner of Income Tax (CIT) issued a revision order under Section 263 on March 26, 2007, setting aside the assessment. The Assessing Officer (AO) then framed a fresh assessment order on December 31, 2007, giving effect to the revision. The assessee filed an appeal against this order before the CIT(Appeals). Meanwhile, the assessee had filed an application before the Income Tax Settlement Commission (ITSC) under Section 245C on December 7, 2005, which was deemed admitted on July 31, 2007. The ITSC passed its final order on March 14, 2008. The present appeal before the ITAT arises from the order of the CIT(Appeals) dated July 22, 2019, which confirmed the AO's order.

What did the Tribunal hold?

The Tribunal held that the assessment order dated December 31, 2007, passed by the AO, and the subsequent order of the CIT(Appeals) are without jurisdiction. The Tribunal reasoned that once an application under Section 245C is filed and admitted by the Settlement Commission under Section 245D(1), the Settlement Commission assumes exclusive jurisdiction over the case. The term 'case' is defined to mean any proceeding for assessment under the Act pending before the AO. The Act does not contemplate parallel proceedings before the Settlement Commission and the AO once the Settlement Commission decides to proceed with the application. Therefore, the AO had no power to pass any order after the Settlement Commission was seized of the matter, other than referring it to the Settlement Commission. The Tribunal found the situation identical to the facts before it, where the search was conducted, an initial assessment was made, an appeal was filed, and then a settlement application was moved. The revision order by the CIT and the subsequent assessment order by the AO were passed after the settlement application was deemed admitted. Consequently, the assessment framed and the CIT(A)'s order were set aside on this jurisdictional ground. The Tribunal stated that it need not go into the merits of the case as it had become academic.

What were the issues?

1. Whether the assessment order dated December 31, 2007, passed by the AO, and consequently the order of the CIT(Appeals), are without jurisdiction and non-est in law, given that the assessee had filed an application before the Income Tax Settlement Commission (ITSC) under Section 245C, which was deemed admitted on July 31, 2007, and the ITSC subsequently passed a final order on March 14, 2008. Assessee's contentions: The assessee argued that once an application is accepted by the Settlement Commission under Section 245C, all proceedings pending before lower authorities are transferred to the Settlement Commission, which then has exclusive jurisdiction over the entire block assessment proceedings. The assessee relied on Section 245I of the Act, stating that the Settlement Commission's order covers the entire block assessment. The assessee also contended that the CIT(A) erred in relying on Section 245D(4) and misinterpreting Sections 245C, 245A, and 245F. The assessee further argued that there can be no estoppel against a statute. Revenue's contentions: The judgment does not record specific contentions from the revenue on this jurisdictional issue.

Which sections of the Income-tax Act were involved?

Section 132,Section 143(3),Section 153BC,Section 245A,Section 245C,Section 245D,Section 245D(1),Section 245D(4),Section 245I,Section 263

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI

Before: SHRI MAHAVIR SINGHAND SHRI MANOJ KUMAR AGGARWAL

Hearing: 05.03.2024Pronounced: 08.03.2024

PER MAHAVIR SINGH, VICE PRESIDENT:

This appeal by the assessee is arising out of the order of the in ITA Commissioner of Income Tax (Appeals)-19, Chennai No.103/2007-08 dated 22.07.2019. The set-aside assessment was framed by the DCIT, Central Circle II(5), Chennai for the block period 01.04.1995 to 28.12.2001 u/s.153BC r.w.s. 143(3) r.w.s. 263 of the Income Tax Act, 1961 (hereinafter the ‘Act’) vide order dated 31.12.2007. 2 IT(SS)A No. 0

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 132

All 14,286 judgments and leading authorities on Section 132 →

Recent GST High Court judgments

Search GST case law →