MOHAMMAD RAFIQ,J. - (1.) These two writ petitions has been filed by the petitioners with identical prayer that order dated 19.12.2016 passed by the Income Tax Settlement Commission, Additional Bench-II, New Delhi(for short 'the Settlement Commission') may be quashed and set aside and the Settlement Commission may be directed to complete the proceedings expeditiously.
(2.) Facts of the case are that the petitioners earlier filed D.B. Civil Writ Petition No. 6089/2008 and 6090/2008 before Division Bench of this Court challenging constitutional validity of provisions of Section 245D(4A) and 245HA of the Income Tax Act, 1961(for short 'the Act') as substituted/inserted by the Finance Act, 2007 insofar as providing for the automatic abatement of settlement application, if no final order is passed by the Settlement Commission before 31.03.2008. Said writ petitions were disposed off by Division Bench of this Court vide order dated 25.04.2016 directing the Settlement Commission to complete the settlement proceedings within a period of six months from the date of receipt of copy of that order. The petitioners claim to have served copy of aforesaid order before the Settlement Commission with letter dated 27.06.2016. The petitioners then made a request vide letter dated 29.06.2016 to the Principal Bench of the Settlement Commission to take up the matters urgently in view of the time limit fixed by Division Bench of this Court. However, since the jurisdiction of the case was transferred to the Additional Bench of the Settlement Commission, matters could not be immediately taken up. Pursuant to letter written by the Secretary, Additional Bench(II) New Delhi to the Secretary, Principal Bench, New Delhi seeking transfer of the record from the Principal Bench to Additional Bench, it transpired that the records of the cases of the petitioners were not traceable. The Chairman of the Settlement Commission approved for reconstruction of the files and in that process, considerable time was consumed and the files could be reconstructed towards the end of September, 2016. In the meantime, reports under Rule 9 of the Rules could be called from the Income Tax Department vide letter dated 02.09.2016.
(3.) Mr. Sanjay Jhanwar, learned counsel for the petitioners argued that proceedings were resumed by the Settlement Commission at a time when less than four months time was left to complete the time limit fixed by this Court. All earnest efforts were made by the petitioners to get the dispute settled with the Income Tax Department within the remaining time period. However, the Settlement Commission vide order dated 19.12.2016 declined to complete the proceedings and allowed it to be abated by observing that the request of Pr. CIT to grant period of one and half month is justified and therefore, the final order cannot be passed within the stipulated period of six months. Learned counsel submitted that the Settlement Commission was unjustified in making the observation that adjournments were sought by the petitioners. It is contended that only two short adjournments were sought by the petitioners, out of which first was on account of compelling circumstances and the voluminous work involved and second adjournment was sought due to death of the father of Shri Neeraj Jain, who was handling the matters on behalf of the petitioner, as counsel. The Settlement Commission has overlooked the fact that as long as 2 months and 5 days time was wasted on account of the fact that original records of the cases were not traceable and the files had to be reconstructed under the order of the Chairman of the Settlement Commission. Therefore, abatement proceedings in these cases were not justified. The petitioner alternatively filed application in the aforesaid writ petitions seeking extension of time limit prescribed by the Court for adjudication of Settlement Application. It is submitted that on account of abatement of the proceedings by the Settlement Commission, Income Tax Department authorities are not proceedings with the regular assessment and served notice on the petitioners on 04.01.2017. Left with no option, the petitioner had to file these writ petitions. It is, therefore, prayed that impugned order passed by the Settlement Commission may be set aside and reasonable time may be granted/extended to the Settlement Commission to concluding the settlement proceedings.;