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M/s. Anantnadh Constructions and Farms Pvt. Ltd. & Ors.

evidence nor any corroborative proof that assessee has earned such undisclosed income. The Ld. A.R. has submitted that the assessee has filed the application under section 245C before Settlement Commission and that application is rejected under section 245D(I) of the Act. Section 245HA is the section which relates to abatement of proceedings before Settlement Commission and as per section 245HA(2) where a proceedings before Settlement Commission abates the AO or as the case may be any other income tax authority before whom the proceeding at the time of application was pending shall be disposed in accordance with the provisions of Act as if no application under section 245 has been made. Section 245HA(3) imposed the restriction and AO or any authority shall be entitled to use this material or information produced by the assessee before the Settlement Commission or the result of inquiry held or evidence recorded by Settlement Commission in the course of proceeding before it as if such material or information has been produced before AO. That amendment has come from 01.06.15. Therefore, the AO has no authority to use this material. Therefore, this reopening is not justified. The Ld. A.R. has relied upon the decision of Hon'ble Gujarat High Court in the case of CIT vs. Maruti Fabrics47 taxman.com 298 (Guj) wherein the Hon'ble Gujarat High Court has considered the evidence which was filed before the Settlement Commission. The Settlement Commission is in respect of 32L of the Custom & Excise Act but the sub section 2 of Section 32L of Settlement Commission and the Settlement Commission in the Income Tax Act are similar and the proceeding before the Settlement Commission are as per section 245C are similar. Therefore, the judgment of Hon'ble Gujarat High Court is applicable and the Hon'ble Gujarat High Court has held that if any admission made before Settlement Commission is not binding to the assessee. The Ld. A.R. has also relied upon the decision of Hon'ble Bombay High Court in the case of Dolat Investment vs. Dy. Commissioner of Income Tax (2010) 38 SOT 123 (Mum) and Ld. A.R. submitted that whatever admission made before the Settlement Commission is not binding to the assessee and whatever the 7 ITA No.5505/M/2016 & ITA No.5510/M/2016 & Ors.

32L(2) For the purpose of sub-section (1), the Central Excise Officer shall be entitled to use all the materials and other information produced by the assessee before the Settlement Commission in the course of the proceedings before it as if such materials, information, inquiry and evidence had been produced before such Central Excise Officer or held or recorded by him in the course of the proceedings before him."

15. We find that section 245HA(1) of the income Tax Act lists several circumstances in which the case before the Settlement Commission would abate; whereas in section 32L(1) non - cooperation of the petitioner is the only ground. The Central Excise Officer derives its power its power to assess such abated proceeding vide section 32L(2) of the Central Excise Act. This is identical to powers vested with an AO under section 245HA(2) and 245HA(3) under the Income Tax Act. It is therefore very clear that the provisions of Central Excise Settlement Commission and that for Income Tax settlement Commission are identical. Therefore, the judgment of Hon'ble Gujarat High Court in the case of Maruti Fabrics although pertaining to Central Excise should be applied to cases abated under section 245HA of the Income Tax Act also.

18. From the above decision of the Tribunal where they have discussed the section 245C(1) and section 245D(i) and 245HA by following observation:

"20. The Finance Act, 2007 made changes to the provisions for settlement of cases contained in Chapter XIX-A of the Income-tax Act 1961. One change involves introduction of a new concept of abatement of proceedings before the Settlement Commission for which provisions has been made in the newly inserted section 245HA relevant portion whereof reads thus :--
"245HA. Abatement of proceeding before Settlement Commission.--(1) where.... (i )an application made under section 245C on or after the 1st day of June, 2007 has been rejected under sub-section (1) of section 245D;
12 ITA No.5505/M/2016 & ITA No.5510/M/2016 & Ors.
M/s. Anantnadh Constructions and Farms Pvt. Ltd. & Ors.
(ii )an application made under section 245C has not been allowed to be proceeded with under sub-section (2A) or further proceeded with under sub-section (2D) of section 245D;