Date of dispatch or service of order isn’t relevant for maintainability of settlement application

The disputed issue before the High Court was as under:

Whether the order of assessment would be deemed to be pending for purpose of maintainability of settlement application just because such order was not dispatched or served?

The High Court held as under:

1) There has been divergent views of Bombay High Court and Delhi High Court on this impugned issue. In case of CIT v. Income tax settlement commission[2015] 58 taxmann.com 264 (Bombay) the Bombay High Court held that the date of service of assessment order is the crucial date only after which application for settlement could not be filed. However, in case of Qualimax Electronics (P.) Ltd. v. Union of India [2010] 27 STT 231 (Delhi) the Delhi High Court held that the crucial date would be the date of dispatch of the order and not the date of its service.

2) However, in our opinion, if such interpretation is accepted, it would lead to grave conflict. In a situation where an order of assessment is already passed, but neither dispatched nor served to the assessee, application for settlement would be maintainable, upon which, the Settlement Commission would have the exclusive jurisdiction to pass appropriate order in terms of section 245D and other provisions of the Act. At the same time order of assessment which has been passed would survive without any mechanism for either annulling such order or providing for primacy of the order of Settlement Commission.

3) The legislature cannot and has not intended to give rise to two parallel orders pertaining to the same period of assessment by two authorities, both may be competent at the time when they were passing the orders. 

4) Thus, date of dispatch or service of order on the assessee would not be material to decide maintainability of settlement application - [2016] 74 taxmann.com 152 (Gujarat)