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4.1 Subsequently, during the pendency of the proceedings for disposal by the ITSC, there has been an amendment by the Finance Act, 2007 w.e.f. 01.06.2007, whereby new provisions i.e. 245D(2D) and 245HA were inserted, which provided that in case the admitted tax and interest was not paid by 31.07.2007, the Settlement application would stand abated on 31.07.2007.
4.2 Since the provisions were against the interests of the assessee, the assessee approached the Hon'ble Punjab and Haryana High Court challenging the validity of the provisions of the section 245D(2D) and 245HA vide writ petition No. 96(as applicable) of 2008 dt. 06/01/2008.
4.4 Thereafter, the Hon'ble Settlement Commission passed an order on 25.04.2016 under section 245HA(1) r.w.s 245D(2D) and the Assessing Officer was also marked a copy of the order dtd. 25.04.2016 u/s 245HA(1) r.w.s. 245D(2) of the Act stating that the proceedings had abated on the grounds that the admitted tax and interest on the income disclosed had not been paid as per newly inserted section 245D(2D). As borne out from the record, this intimation letter dated 25.04.2016 was communicated to the Principal Commissioner of Income Tax on 02.05.2016. Following this, the assessee received the notice u/s 142(1) of the Act from the Ld. AO. In response to the said notice, the assessee submitted a reply contending that the proceedings have become time-barred. The Ld. AO has given the reasons for completion of the assessment at para 6.1(ii) and as can be deciphered at para 6.1 of page 10 of the order of the CIT(A) and completed the assessment under section 143(3) of the Income Tax Act,1961 .

16. Second proviso to section 153(4) reads as under:

"Provided further that where a proceeding before the Settlement Commission abates under section 245HA, the period of limitation available under this section to the Assessing Officer for making an order of assessment, reassessment or re-computation, as the case may be, shall, after the exclusion of the period under subsection (4) of section 245HA, be not less than one year; and where such period of limitation is less than one year, it shall be deemed to have been extended to one year; and for the purposes of determining the period of limitation under sections 149, 153B, 154, 155, 158BE and 231 and for the purposes of payment of interest under section 243 or section 244 or, as the case may be, section 244A, this proviso shall also apply accordingly."

19. When the application of the assessee had abated or became redundant by operation of Law on 31.07.2007, then there is no occasion for the ITSC to pass an order u/s 245D(4). This view gets further fortified on perusal of the intimation letter of the TTSC dated 25.04.2016 issued u/s 245HA(1) r. w.s. 245D(2D).

20. The case of the AO as discussed at paragraph 6.1 is that the order abating the proceedings was passed by the TTSC on 25.04.2016 and the same was received in the office of the Pr. CU, Patiala on 02.05.2016. Therefore, as per the provisions of section 153(4) read with proviso the assessment is to be completed within 60 days from receipt of order u/s 245C by the CTT. As stated above, the assessee in the present case is covered u/s 245HA(l)(ii) and therefore, the proceedings before the ITSC shall abate on the specified date as referred to in Explanation (b) i.e. 31st day of July, 2007. Once the proceedings before the TTSC are abated on 31st July, 2007, then, there cannot be any occasion for the TTSC to pass any order u/s 245D(4). Also the proceedings which have been abated once, i.e. on 31st day of July, 2007 cannot again abate on a later date i.e. on 25.04.2016 which is the case of AO.