JUDGMENT : BHARGAV D. KARIA, J. 1. Learned advocate Mr. B.S. Soparkar for the petitioner tendered the draft amendment. The same is allowed in terms of the draft. To be carried out forthwith. 2. Heard learned Senior Advocate Mr. S.N. Soparkar assisted by learned advocate Mr. B.S.Soparkar for the petitioner and learned Senior Standing Counsel Mr. Varun Patel with learned advocate Mr. Dev D. Patel for respondent No.2. 3. Rule returnable forthwith. Learned advocate Mr. Dev D. Patel waives service of notice of rule for the respondent No.2. 4. Having regard to the controversy involved in this petition in narrow compass, with the consent of learned advocates appearing for the respective parties, the matter is taken up for final hearing. 5. By this petition under Articles 226 and 227 of the Constitution of India, the petitioner has prayed for the following reliefs: “(a) Quash the order passed by the Respondent No.1 dated 27.12.2023 at Annexure A and Direct the Respondent No.1 to pass a fresh order u/s. 245D(4) in the case of the petitioner on merits and in accordance with law. (aa) quash and set aside the assessment orders passed by the Respondent No.3 on 27.07.2021 for the Assessment years 2013- 14 to Assessment Years 2018-19 at Annexure CA1, CA2, CA3, CA4, CA5, CA6 and CA7. (b) Pending the admission, hearing and final disposal of this petition, stay implementation and operation of the impugned order dated 27.12.2023 at Annexure A.” 6. Brief facts of the case are as under : 6.1 The applicant is engaged in the business of share trading activities through stock exchange and outside stock exchange, facilitation of dematerialization of shares held physically, advisory/consultancy services, other ancillary activities connected to shares/stock market/money leading against security obtained. The petitioner derived income from partnership firm (only A.Y. 2019-20) besides income from dividend, capital gains and other sources in other years. 6.2 A search proceedings u/s. 132 of the Income Tax Act, 1961 [for short ‘the Act’] was initiated at the business premises of the petitioner on 06.03.2018. 6.3 A notice u/s. 153A for the A.Y. 2013-14 to 2018-19 and u/s. 143(2) for A.Y. 2019-20 on 22.10.2020 was issued. 6.4 Section 245B of the Income Tax Act, 1961 (for short ‘the Act’) was amended by the Finance Act,2021 which provides that Income Tax Settlement Commission shall cease to operate w.e.f. 1st Day of February,2021. 6.3 A notice u/s. 153A for the A.Y. 2013-14 to 2018-19 and u/s. 143(2) for A.Y. 2019-20 on 22.10.2020 was issued. 6.4 Section 245B of the Income Tax Act, 1961 (for short ‘the Act’) was amended by the Finance Act,2021 which provides that Income Tax Settlement Commission shall cease to operate w.e.f. 1st Day of February,2021. Further, it has also been provided that no application for settlement can be filed on or after 01.02.2021. 6.5 During the pendency of assessment proceedings, the applicant filed petitions before the Income Tax Settlement Commission [‘ITSC’ for short] on 30.03.2021. 6.6 The petitioner upon filing the aforesaid petition, intimated respondent Nos.2 and 3 assessing officer (AO) about the same on the same date by filing Form 34BA to drop the assessment proceedings. Despite the same, the AO completed the assessment proceedings and passed the assessment orders on 27.07.2021 on the ground that the petition was filed before the Hon’ble ISTC after the cessation of settlement commission. 6.7 The aggrieved petitioner has also filed appeal challenging the assessment orders before the Commissioner of Income Tax (Appeals). 6.8 Meanwhile, in order to provide relief to the taxpayers who were eligible to file application as on 31.01.2021 but could not file the same due to cessation of ITSC vide Finance Act,2021, the Central Board of Direct Taxes (CBDT) issued a press release on 07.09.2021 giving taxpayers an opportunity to file application for settlement by 30.09.2021 if the assessee who were eligible to file application for settlement on 31.01.2021 for the assessment years for which the application is sought to be filed and; where the relevant assessment proceedings of the assesses are pending as on the date of filing the application for settlement. 6.9 The petitioner thereafter sent a communication dated 29.09.2021 to respondent no.1 stating that since he has duly satisfied the conditions laid down in para 4 of the CBDT order, his application filed on 30.03.2021 be considered as a ‘Pending Application’ as defined in section 245A(b) of the Act. 6.10 Thereafter, on 01.11.2021, the Central Government made E-Settlement Scheme 2021 to operationalize the functioning of the respondent no.1 -Interim Board. 6.11 The Interim Board provided to the petitioner copy of report under Rule 9 of the Income-Tax Settlement Commission (Procedure) Rules, 1997(for short ‘the Rules’) vide email dated 28.09.2022 and sought for the reply. 6.10 Thereafter, on 01.11.2021, the Central Government made E-Settlement Scheme 2021 to operationalize the functioning of the respondent no.1 -Interim Board. 6.11 The Interim Board provided to the petitioner copy of report under Rule 9 of the Income-Tax Settlement Commission (Procedure) Rules, 1997(for short ‘the Rules’) vide email dated 28.09.2022 and sought for the reply. The respondent No.1 time and again conducted the faceless hearing of the settlement application of the petitioner and passed an order dated 27.12.2023 considering the applications of the petitioner as ‘non-est’ and not maintainable on the ground that the assessment orders have not been quashed or set aside by the competent authority. Hence, the petitioner approached this Court by way of present petition seeking aforesaid reliefs. 7. Learned Senior Advocate Mr. S.N. Soparkar submitted that as per the provision of section 245F(i) the Act, the “Interim Board” is defined under section 245A(da) of the Act w.e.f. 01.02.2021 and respondent no.1 -Interim Board is vested with all powers of the settlement board to adjudicate pending applications after 01.02.2021. 7.1 Learned Senior Advocate Mr. S. N. Soparkar submitted that as per the provision of section 245F(1)&(2) of the Act, the Settlement Commission has the exclusive jurisdiction once the application is made under section 245C has been allowed to be proceeded with under section 245D of the Act. It was therefore submitted that the Income Tax authorities could not have passed the assessment order as the petitioners have already filed the settlement application on 30.03.2021. 7.2 It was further submitted that as per the circular dated 28.09.2021 being ORDER F.No.299/22/20211-DIR (INV.III)/174, the Central Board of Direct Taxes, in exercise of powers under clause (b) of sub-section (2) of section 119 of the Act in order to avoid genuine hardship to assessee, has authorized the Commissioner of Income Tax, posted as Secretary to the Settlement Commission prior to 01.02.2021 to admit the application for settlement on behalf of Interim Board filed after 31.01.2021. It was submitted that the application filed by the petitioner on 30.03.2021 is a valid application in view of the said circular and accordingly, as provided under the provisions, the Income tax authorities could not have passed the assessment orders. It was submitted that the application filed by the petitioner on 30.03.2021 is a valid application in view of the said circular and accordingly, as provided under the provisions, the Income tax authorities could not have passed the assessment orders. 7.3 It was further submitted that the Interim Board, without considering the effect of the aforesaid circular, considered the assessment order passed by the Income Tax authorities and only on that ground, the application of the petitioner was not entertained. It was further submitted that as the Interim Board is discharging the same function as that of the Settlement Commission after 01.02.2021 and the settlement application filed by the petitioner is considered to be a valid application, the Interim Board ought to have entertained the application and ought to have passed the order under section 245D (4) of the Act on merits after considering the submissions to be made by the petitioner and the respondents as per the Rule 9 report. 8. On the other hand, learned Senior Standing Counsel Mr. Varun Patel appearing for respondent No.2 submitted that the respondents have categorically stated in Rule 9 report that the application filed by the petitioner is not eligible to be considered as the assessment orders have already been passed during the interregnum period in the month of July 2021. It was pointed out that when the petitioner filed the settlement application, the said application was valid but in view of the passing of the assessment order, the Interim Board has rightly not entertained the settlement application filed by the petitioner as the Interim Board has no power to quash and set aside the assessment orders which are already passed when the application was taken up for hearing. 9. Having heard learned advocates for the respective parties and having considered the facts and the impugned order passed by the Interim Board, it would be germane to refer to the relevant provisions of the Act which have been substantially amended by the Finance Act,2021 w.e.f. 01.02.2021: “245A(da):- “Interim Board” means the Interim Board for Settlement constituted under section 245AA. 9. Having heard learned advocates for the respective parties and having considered the facts and the impugned order passed by the Interim Board, it would be germane to refer to the relevant provisions of the Act which have been substantially amended by the Finance Act,2021 w.e.f. 01.02.2021: “245A(da):- “Interim Board” means the Interim Board for Settlement constituted under section 245AA. 245C:- Application for settlement of cases (1) An assessee may, at any stage of a case relating to him, make an application in such form and in such manner as may be prescribed, and containing a full and true disclosure of his income which has not been disclosed before the Assessing Officer, the manner in which such income has been derived, the additional amount of income-tax payable on such income and such other particulars as may be prescribed, to the Settlement Commission to have the case settled and any such application shall be disposed of in the manner hereinafter provided :…….. 245 F:- Powers and procedure of Settlement Commission :- (1) In addition to the powers conferred on the Settlement Commission under this Chapter, it shall have all the powers which are vested in an income-tax authority under this Act. 245 F:- Powers and procedure of Settlement Commission :- (1) In addition to the powers conferred on the Settlement Commission under this Chapter, it shall have all the powers which are vested in an income-tax authority under this Act. (2) Where an application made under section 245C has been allowed to be proceeded with under section 245D, the Settlement Commission shall, until an order is passed under sub-section (4) of section 245D, have, subject to the provisions of sub-section (3) of that section, exclusive jurisdiction to exercise the powers and perform the functions of an income-tax authority under this Act in relation to the case : Provided that where an application has been made under section 245C on or after the 1st day of June, 2007, the Settlement Commission shall have such exclusive jurisdiction from the date on which the application was made: 245H:-Power of Settlement Commission to grant immunity from prosecution and penalty (1) The Settlement Commission may, if it is satisfied that any person who made the application for settlement under section 245C has co-operated with the Settlement Commission in the proceedings before it and has made a full and true disclosure of his income and the manner in which such income has been derived, grant to such person, subject to such conditions as it may think fit to impose, immunity from prosecution for any offence under this Act or under the Indian Penal Code (45 of 1860) or under any other Central Act for the time being in force and also from the imposition of any penalty under this Act, with respect to the case covered by the settlement: [Provided that no such immunity shall be granted by the Settlement commission in cases where the proceedings for the prosecution for any such offence have been instituted before the date of receipt of the application under section 245C:] [Provided further that the Settlement Commission shall not grant immunity from prosecution for any offence under the Indian Penal Code (45 of 1860) or under any Central Act other than this Act and the Wealth Tax Act, 1957 (27 of 1957) to a person who makes an application under section 245C on or after the 1st day of June, 2007.] [(1A) An immunity granted to a person under sub-section (1) shall stand withdrawn if such person fails to pay any sum specified in the order of settlement passed under sub section (4) of section 245D within the time specified in such order or within such further time as may be allowed by the Settlement Commission, or fails to comply with any other condition subject to which the immunity was granted and thereupon the provisions of this Act shall apply as if such immunity had not been granted. (2) An immunity granted to a person under sub-section (1) may, at any time, be withdrawn by the Settlement Commission, if it is satisfied that such person had, in the course of the settlement proceedings, concealed any particulars material to the settlement or had given false evidence, and thereupon such person may be tried for the offence with respect to which the immunity was granted or for any other offence of which he appears to have been guilty in connection with the settlement and shall also become liable to the imposition of any penalty under this Act to which such person would have been liable, had not such immunity been granted.” 10. The circular dated 28.09.2021 issued by the CBDT reads as under: “ORDER F. NO. 299/22/2021- DIR(INV.III)/174, DATED 28.09.2001 The Finance Act, 2021 has amended the provisions of the Act to inter alia provide that the Income Tax Settlement Commission (ITSC) shall cease to operate with effect from 1.2.2021. Further, it has also been provided that no application for settlement can be filed on or after 1.2.2021 which was the date on which the Finance Bill, 2021 was laid before the Lok Sabha. In order to dispose off the pending settlement applications as on 31.1.2021, the Central Government has constituted Interim Board for Settlement (hereinafter referred to as the ‘Interim Board’), vide notification No. 91 of 2021 dated 10.08.2021. 2. Meanwhile, in order to avoid genuine hardship to number of taxpayers who were in the advanced stages of filing their application for settlement before the ITSC as on 1.2.2021 and also due to the hardship faced during the covid pandemic by the tax payers, the Central Board of Direct Taxes (referred to as the ‘Board) had provided relief vide Press Release dated 7.9.2021 thereby allowing assessee eligible to file application for settlement on 31.01.2021 to file such applications till the extended period of 30.09.2021. 3. 3. In view of the above, the Board in exercise of its power under clause (b) of sub section (2) of section 119 of the income Tax Act, 1961 (the Act) in order to avoid genuine hardship to assesses authorizes the Commissioner of Income Tax posted as Secretary to the Settlement Commission prior to 1.2.2021 to admit an application for settlement on behalf of the Interim Board filed after 31.01.2021 which is the date mentioned in sub section (5) of section 245C of the Act for filing such application and before 30.09.2021 and treat such applications as valid and process them as “pending applications” as defined in clause(b) of section 245A of the Act. 4. The above relaxation is available to the applications filed:- (i) by the assesses who were eligible to file application for settlement on 31.01.2021 for the assessment years for which the application is sought to be filed (relevant assessment years); and (ii) where the relevant assessment proceedings of the assessee are pending as on the date of filing the application for settlement. 5. The Hindi version of the order shall follow.” 11. On conjoint reading of the above provisions together with the circular issued by the CBDT in exercise of powers under section 119(2)(b) of the Act, the application filed by the petitioner under section 245C of the Act would be an eligible application though filed after 31.01.2021 and the same is required to be considered as pending application for adjudication on merits. 12. The assessment order passed by the respondent No.3 on 27.07.2021 for A.Ys. 2013- 14 to 2019-20 could not have been passed as the application filed by the petitioner for settlement is considered to be pending and the Interim Board is required to exercise all the powers of the Settlement Commission with regard to pending application and accordingly, as per provision of section 245F(2) of the Act, the Interim Board is vested with the powers of the Settlement Commission and jurisdiction and Income Tax authority could not have proceeded further with the assessment proceedings in view of the pendency of the settlement application before the Interim Board. The Interim board therefore would have exclusive jurisdiction over the case and the respondent No.3 had no jurisdiction to pass any assessment order during the pendency of the application before the Settlement Commission/Interim Board. The Interim board therefore would have exclusive jurisdiction over the case and the respondent No.3 had no jurisdiction to pass any assessment order during the pendency of the application before the Settlement Commission/Interim Board. It appears that the respondent no.3 has passed assessment orders in July 2021 when there was no clarity with regard to settlement applications filed after 31.01.2021. 13. Be that as it may, in view of the clear legal position prevailing even after 01.02.2021, the assessment orders passed by the respondent No.3 are non-est and would not survive as the same could not have been passed as per provision of section 245F(2) of the Act. 14. In view of the above facts, the impugned assessment orders are hereby ordered to be quashed and set aside and in view of quashing of the setting aside of the assessment order dated 27.07.2021 passed by the respondent No.3, the very basis of rejecting the application by the Interim Board also ceases and accordingly, impugned order passed by the Interim Board is also quashed and set aside and the matter is remanded back to the Interim Board to decide the settlement application treating the same as pending application as per the Circular dated 28.09.2021 to be adjudicated on merits and to pass the order under section 245D(4) of the Act, after giving opportunity of hearing to both the sides in accordance with law. The petition accordingly succeeds and is allowed in aforesaid terms. Rule is made absolute to the aforesaid extent. No order as to costs.