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Govt moves Bill in Lok Sabha to fine-tune certain provisions of Income Tax & acquire power to raise Customs duty on marble & granite up to WTO bound rate of 40%
Taxation Laws (Amendment) Bill - 2016
Taxation Laws (Amendment) Bill, 2016
CASE LAW
2016-TIOL-1707-HC-MUM-IT
YASHOVARDHAN BIRLA Vs DCIT: BOMBAY HIGH COURT (Dated: August 3, 2016)
Income tax - Sections 245A & 245D(1).
Keywords - pendency of assessment - service of assessment order & settlement application.
Whether a decision of the Court would lose its binding value as a precedent, merely because according to one of the parties an issue had been inadequately argued - NO: HC
Whether the declaration of law by the High Court is binding on all authorities within the State including the Commission - YES: HC
Whether it is open to the assessee to invoke the provisions of Chapter XIXA of the I-T Act for Settlement, till the date the assessment order is not served upon him - YES: HC
Whether an assessee can be prejudiced for acting in terms of the representation made by the Settlement Commission - NO: HC
Whether a CBDT Circular can overrule a decision of a Court of law - NO: HC
The assessee had preferred the present petition challenging the order, whereby the Settlement Commission had dismissed his application for settlement under Chapter XIX A of the I-T Act relating to A.Ys 1989-99 to 2014-15, on the ground that no assessment order was pending on the date of filing application.
Having heard the parties, the High Court held that,
++ it is found that the core dispute viz. what is the date on which the assessment is said to be made for the purpose of ousting the jurisdiction of the Commission under Chapter XIX A of the I-T Act to entertain an application for settlement, was a subject of consideration by this Court in ITSC case, wherein it was laid down that assessment order is made when it is served for purposes of considering the jurisdiction of the Commission to entertain such an application is binding upon the Commission and upon the Revenue. However, the Revenue's counsel urged that decision in ITSC case would not apply to the facts of present case. This for the reason that the Court therein had had only to consider whether or not service of the order passed by the AO was complete, before the assessee therein had filed its application for settlement with the Commission. It did not have occasion to deal with the submission now being urged by him that Explanation (iiia) of Section 245A(b), when strictly construed would not mean service of the assessment order but would only mean making of the order. This submission in turn is supported by the Parliament making use of different words herein then that of "service", "issue" or "communicated" as used in the other provisions of the Act. Therefore, this difference in language must be given a meaning and it cannot mean "service". These distinctions now being raised are of no avail as the Revenue had raised this very issue viz. the assessment was not pending on the date the application of settlement was filed with the Commission in ITSC case. Therefore, the aforesaid issue was a subject matter of consideration including the definition of case as defined u/s 245A(b), which contains the Explanation which specifies the date on which assessment order is made to be the date when it ceases to be pending. The very issue urged by the Revenue, was subject of consideration before the Court in ITSC case. Therefore, the aforesaid decision can by no stretch be considered to have been rendered subsilentio;
++ this Court in ITSC case has declared that for purposes of making an application for settlement, a case i.e. an assessment would be pending till such time as the assessment order is served upon the assessee. The declaration of law by this Court is binding on all authorities within the State including the Commission. The assessee was entitled to proceed on the basis that till the service of the assessment order, the case continues to be pending with the AO. Therefore, it was open to him to invoke the provisions of Chapter XIXA of the Act on 30th March, 2016 as till that date the assessment order was not served upon him. Moreover, the assessee brought to our notice that even the Commission had on its website represented that an application for settlement could be filed with it, till such time the assessment order is served upon the assessee. We find that in the present facts, the assessee was entitled to act upon the above representation. It is not fair for the State to now take up the stand that on the proper interpretation of the provisions of law, the representation made by it is not in accordance with law. In any case, the assessee could not be prejudiced for acting in terms of the representation. We are informed that the above representation is withdrawn by the Commission post 12th April, 2016. Therefore, on the above ground also in the present facts, the impugned order is not sustainable. The Revenue's counsel also sought to support the impugned order of the Commission on the basis that CBDT Circular No.14 of 2014 which clarifies that for the purpose of Chapter XIXA of the Act, an assessment would cease to be pending case, when an assessment order is passed. This is in substitution of the earlier Circular No.3 of 2008 which provided that an assessment order would be said to have been made only on it being served upon the assessee for the purpose of Chapter XIX A of the Act. There is no merit in the above submission. Firstly, a CBDT Circular cannot overrule a decision of a Court of law. Secondly, this Circular was available when this Court rendered the decision in ITSC and yet it does not seem to have relied upon. This possibly for the reason that a CBDT Circular interpreting a statutory provision is binding upon the Officers of the Revenue only when it is beneficial to the assessee and not otherwise. Therefore, the impugned order of the Commission is quashed and set aside. The application for settlement is restored to the file of the Commission at the stage of 245D(1).
Case disposed of
