Circular No. 16 /2014
                          F.No.142/14/2007-TPL(Part)
                             Government of India
                             Ministry of Finance
                            Department of Revenue
                         Central Board of Direct Taxes
                                     ****

                                                   Dated: 17th November, 2014

SUB:- Clarification in respect of Circular No.3 of 2008 dated 12/3/2008 of
       CBDT ­ reg.

Chapter XIX-A of the Income-tax Act, 1961 contains provisions relating to
settlement of cases by the Income-tax Settlement Commission (ITSC). The
provisions contained in the said chapter were amended by Finance Act, 2007
and a Revised Settlement Scheme was put in place. Explanatory Circular No.
3/2008 dated 12.03.2008 issued by CBDT vide para 61 (comprising sub paras
61.1 to 61.17) deals with Revised Settlement Scheme.

2. Para 61.2 of Circular No.3 of 2008 reads:-
"61.2 under the existing provisions, an assessee may make an application to
the Commission at any stage of the proceedings in his case pending before
any Income-tax Authorities. After 31 st May, 2007, an assessee can make an
application to the Commission only during the pendency of the proceedings
before the Assessing Officer. It is further clarified that (a) since intimation
under section 143(1) is not an assessment order, there will be no bar in filing
an application for settlement subsequent to receipt of an intimation under
section 143(1). It is not material whether time-limit for issue of notice under
section 143(2) has expired or not; (b) the assessment shall be deemed to have
been completed only on the date of service of assessment order to the
applicant".






3.    It has been inadvertently stated in para 61.2 of Circular No.3 of 2008
that the assessment shall be deemed to have been completed only on the date
of service of assessment order to the applicant. This statement is not in
consonance with the provisions contained in Explanation to clause (b) of
section 245A of the Income-tax Act which, inter alia, provides that a
proceeding for assessment of any assessment year shall be deemed to have
concluded on the date on which the assessment is made.

4.    In view of the above, para 61.2 of Circular No.3 of 2008 is replaced with
the following with effect from the 1st day of June, 2007:-

      "61.2 Under the existing provisions, an assessee may make an
application to the Commission at any stage of the proceedings in his case
pending before any Income-tax Authorities. After 31 st May, 2007, an assessee
can make an application to the Commission only during the pendency of the
proceedings before the Assessing Officer. It is further clarified that (a) since
intimation under section 143(1) is not an assessment order, there will be no
bar in filing an application for settlement subsequent to receipt of an
intimation under section 143(1). It is not material whether time-limit for issue
of notice under section 143(2) has expired or not; (b) the assessment shall be
deemed to have been completed on the date on which the assessment order is
passed."








                                                             (Gaurav Kanaujia)
                                                              Director (TPL-IV)

Copy to:-

      1. PS to FM/ OSD to FM/ OSD to MoS(R).
      2. PS to Secretary (Revenue).
      3. The Chairman, Members and all other officers in CBDT of the rank
         of Under Secretary and above.
      4. All Pr. Chief Commissioners/ Pr. Director General of Income-tax ­
         with a request to circulate amongst all officers in their regions/
         charges.
      5. Pr. DGIT (Systems)/ Pr. DGIT (Vigilance)/ Pr. DGIT (Admn.)/ Pr. DG
         (NADT)/ Pr. DGIT (L&R).
      6. Media Co-ordinator and Official spokesperson of CBDT.
7. DIT(IT)/   DIT(RSP&PR)/ DIT(Audit)/ DIT(Vig.)/ DIT(Systems)/
   DIT(O&MS)/ DIT(Spl. Inv.).
8. The Comptroller and Auditor General of India (30 copies).
9. Joint Secretary and Legal Advisor, Ministry of Law and Justice, New
   Delhi.