M3M India Holdings Pvt. Ltd vs. ITSC (P&H High Court)

CWP No.5307 of 2019 (O&M) 1
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
263 CWP No.5307 of 2019 (O&M)
Date of decision : 22.10.2019
M/s M3M India Holdings Pvt. Ltd. …… Petitioner
versus
Income Tax Settlement Commission (IT/WT)
& ors. …… Respondents
CORAM : HON’BLE MR.JUSTICE AJAY TEWARI
HON’BLE MR.JUSTICE HARNARESH SINGH GILL
***
Present : Mr. Ved Kumar Jain, Advocate and
Mr. Sunish Bindlinsh, Advocate
for the petitioner.
Mr. Tajender K.Joshi, Advocate
for respondent No.1.
***
AJAY TEWARI, J. (Oral)
1. This petition has been filed against the order of the
Settlement Commission rejecting an application for settlement filed by
the petitioner primarily on the ground that no proceedings were pending
on the day.
2. Brief facts are that while the assessment proceedings were
pending the petitioner sent a mail to the Assessing Officer on 26.12.2018
indicating that assessment proceedings should be deferred because the
petitioner intended to move the Settlement Commission. On 27.12.2018
the Assessing Officer finalized the assessment, passed the order and
despatched it through post. Admittedly, before it was received or even
delivered by the postal authorities the petitioner moved the application
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before the Settlement Commission on 28.12.2018. The Commission by
the impugned order accepted the stand of the revenue that on the date of
the application the assessment proceedings having been concluded, the
application did not lie. These facts are undisputed.
3. The precise contention of the counsel for the petitioner is that
the assessment proceedings could not have been said to be concluded till
such time as the assessment order was not served upon the Assessee. In
this connection, he has relied upon CIT Vs. ITSC (2015)58
taxmann.com 264 followed by Yashovardhan Birla Vs. Deputy
Commissioner of Income Tax, Central Circle (2016)73 taxmann.com 5.
In both these cases, (where also the issue was similar as in the present
case), the Bombay High Court had held that the proceedings could not be
said to have been concluded merely because an order had been passed or
even despatched, but could be said to be concluded only when the order
was served. He has further argued that the revenue has accepted this
proposition of law in these cases and has allowed these judgments to
become final.
4. Counsel for the revenue has also relied upon a decision of
this Court in V.R.A. Cotton Mills (P) Ltd. Vs. Union of India (2013) 33
taxmann.com 675 wherein the petitioner had filed its income tax return
on 29.09.2009 for the assessment year 2009-2010 for the year ending
31.03.2009. Earlier a notice under Section 142(1) of the Income Tax Act,
1961 (for short the Act) was issued seeking certain information.
Subsequently, notice under Section 143(2) was issued on 30.09.2010 and
the limitation to serve that notice in that case was upto 30.09.2010. The
issue before this Court was whether the date of the notice would be taken
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as per its service or as per its issuance. It was in those circumstances that
the Court had held that for the purposes of computing the limitation of 30
days for service of notice under Section 143(2) of the Act the
determinative date could be the date of issue and not the date of service.
In our view, this judgment is not applicable. Because there the question
which had to be determined was whether the Assessing Officer had acted
with due despatch within the period of limitation and this Court had held
that since he had despatched the notice within the date of limitation the
service thereof would be redundant. In the present case, the matter has to
be viewed from the perspective of the Assessee i.e. to say when the
Assessee is bound to act. It cannot be said that before the notice was
even sought to be served upon the Assessee the proceedings qua him
could not be said to have concluded.
5. Counsel for the revenue at the very outset states that he has
no knowledge whether the Bombay High Court cases have been allowed
to become final but he has relied upon the Gujrat High Court judgment
titled as M/s Shlibhadra Developers Vs. Secretary and 2 ors. 2016(10)
TMI 778 where it was held to the contrary.
6. Counsel for the petitioner has refuted this argument by
asserting that one of the factors which weighed with the Gujrat High
Court in the case of Shlibhadra (supra) was that the order was sought to
be personally served upon the Assessee but the Assessee refused to accept
the order, and apart therefrom, in an appeal filed by that Assessee to the
Supreme Court leave has been granted.
7. In our considered opinion, the petition must succeed. Apart
from the fact that the judgment passed in Shlibhadra (supra) could be
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distinguished (since in that case the Assessee had refused service), what
we find in the present case is that the petitioner had communicated to the
Assessing Officer on 26.12.2018 itself that it was intending to move an
application before the Settlement Commission.
8. Counsel for the revenue asserts that the Assessing Officer
was working against a time constraint since limitation was to expire on
31.12.2018.
9. Be that as it may, in the totality of circumstances, we are
inclined to follow the view of the Bombay High Court passed in
Yashovardhan Birla (supra) wherein it was held as follows :-
“12. In any event, the Rule of Law requires like cases to be
decided alike. Therefore, the law of precedents. This Court
in Income Tax Settlement Commission (supra) 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 petitioner
was entitled to proceed on the basis that till the service of
the assessment order, the case continues to be pending with
the Assessing Officer. 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.
16. However, we need not dilate on the above two
decisions cited at the Bar as the controversy before this
Court stands concluded by a binding decision of a
co-ordinate bench of this Court in Income Tax Settlement
Commission (supra) which holds that the assessment order
for purposes of Chapter XIX A of the Act can be said to have
been made when it is served upon assessee concerned. This
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considered view of a co-ordinate bench was rendered
keeping in view the object and purpose of introducing
Chapter XIX A into the Act i.e. Settlement provisions. We
see no reason to differ from the above view.
17. Therefore, the impugned order dated 12th April, 2016
of the Commission being Exh.G. to the petition is quashed
and set aside. The application for settlement is restored to
the file of the Commission at the stage of 245D(1) of the Act.
The period of 14 days as provided in Section 245D(1) of the
Act, will run from the date this order is first communicated
by either of the parties to the Commission.”
10. Consequently, order dated 14.02.2019 is set aside. Petition
stands disposed of.
11. Since the main case has been decided, the pending
C.M. Application, if any, also stands disposed of.
(AJAY TEWARI)
JUDGE
(HARNARESH SINGH GILL)
JUDGE
22.10.2019
pooja sharma-I
Whether speaking/reasoned Yes/No
Whether Reportable : Yes/No
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