TMI Blog1993 (12) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax (Appeals) on 26-4-1989. At the time of filing of the appeal, the balance of tax of Rs. 13,68,006 on the admitted income remained unpaid. However, on 20-6-1989, the assessee paid the impugned amount and filed another set of appeals on 22-6-1989 along with a petition for condonation of delay in the filing of the appeal. Another petition explaining the circumstances in which it was not able to pay the tax on the admitted income on earlier occasions was also filed along with the condonation petition. In the first petition it was stated as follows : "In fact the petitioner had filed appeal against assessment order on 26-4-1989, i.e., within the time limit before you. However, it is now come to the knowledge of the petitioner that there has been a change in the law from 1-4-1989 by which the power to condone the lapse of not paying the tax before filing the appeal under section 140A given to Commissioner of Appeals is withdrawn. Since at the time of filing the appeal on 26-4-1989 the petitioner was not aware of this position and they were under the impression that since the tax under 140A was not paid by them on account of acute liquidity problems, this will be condoned and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arose when a notice under section 143(2) was issued and that was prior to 1-4-1989 and hence the conditions attached to the right of appeal as they stood prior to 1-4-1989 would fall for consideration. Reliance was placed on the observations of Chaturvedi and Pithisaria's Income-tax Law, 3rd Edition, Volume 5, pages 4194 to 4196. The learned CIT (Appeals) quoted the comments of the learned authors in extenso in his appellate order and agreed with the assessee that as the lis in the tax proceedings arose prior to 1-4-1989, the unamended provisions of section 249(4) would fall for consideration in the case of the appeal filed by the assessee. Then he looked into the circumstances which prevented the assessee from the payment of the tax on the admitted income at any time on or before the filing of the appeal and on a careful consideration of the circumstances explained by the assessee in its petition for condonation of the technical lapse in the payment of the tax on the admitted income, he came to the conclusion that the assessee was, in fact, suffering from acute financial difficulties, but, however, it managed to pay the tax on the admitted income subsequently with great difficult ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was filed after the coming into force of the amended provisions of section 249(4), taking away the right of the CIT (Appeals) to condone the non-payment of tax and as the assessee did not pay the tax on the admitted income when it filed the first set of appeals, the CIT (Appeals) should not have entertained the same. Turning to the alternative plea of Sir C.K. Nair that the second set of appeals filed by the assessee after payment of tax on the admitted income with a petition for condonation of delay in the filing of the second set of appeals, Sri Abraham submitted that it should not be entertained at this stage since the CIT (Appeals) had not considered the second set of appeals filed before him. 6. Having regard to rival submissions and the materials on record, we uphold the order of the CIT (Appeals). In Bengal Card Board Industries Printers (P.) Ltd.'s case, it was held at page 194 by the Calcutta High Court as follows : "The right of appeal is a statutory right. It is a creature of the statute. The right of appeal is not merely a matter of procedure. It is a substantive right. This right is vested in an assessee when proceedings are first initiated and before a decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is plea. Whenever there is a proposition by one party and an opposition to that proposition by another a 'lis' arises. It may be conceded, though not deciding it, that when the assessee files his return a 'lis' may not immediately arise, for under section 11(1) the authority may accept the return as correct and complete. But if the authority is not satisfied as to the correctness of the return and calls for evidence, surely a controversy arises involving a proposition by the assessee and an opposition by the State. The circumstance that the authority who raises the dispute is himself the Judge can make no difference, for the authority raises the dispute in the interest of the State and in so acting only represents the State. It will appear from the dates given above that in this case the 'lis' in the sense explained above arose before the date of amendment of the section. Further, even if the 'lis' is to be taken as arising only on the date of assessment, there was a possibility of such a 'lis' arising as soon as proceedings started with the filing of the return or, at any rate, when the authority called for evidence and started the hearing and the right of appeal must be taken to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal credits found in the accounts of the partners in the assessment year 1984-85, it could not take credit for the same amount in the assessment year 1986-87. Thus, he made an addition of Rs. 9,84,720. The assessee appealed. The learned CIT (Appeals) accepted the contention of the assessee that the credits appearing in the partners' current accounts during the previous year relevant to the assessment year 1986-87 are only rectification entries passed for reconciling the balances in the assessee's accounts with the accounts of the sister concerns. In this connection, he went into the entries passed in the journal and extracted the same as follows : Date Particulars L.F. Dr. Cr. 31-3-1986 P.V. Hemalatha Dr C7/1 196944 P.K. Kum. Kamalam ,, C8/1 196944 A. Samikutty ,, C9/1 196944 K.M. Balakrishnan ,, C10/1 123090 ,, C11/1 183090 Nedooli Kunhiperachan ,, C12/1 147708 To KTC ,, K10 984720 (Being freight collections wrongly allocated in the books of NTC instead of KTC as per order dated 23-9-1985 for the asst. year 1983-84 of NTC) Kerala Transport Co.Folio Dr. Cr. Date Particulars M.L. S.L. 31-3-1986 Nidhish Transport Corpn. Dr. N1/7 984720 To current a/c. Sri P.V. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 721, the collections of M/s. Nidhish Transport Corporation on cash basis. However, the assessment had proceeded in a much larger amount as the Assessing Officer was computing the freight collections on mercantile basis instead of on cash basis. Thus, finally this sum of Rs. 9,84,721 stood assessed in the hands of M/s. Kerala Transport Co. in the assessment year 1983-84. In the assessment year 1984-85, the assessee had passed entries to adjust the accounts of the partners in respect of the omissions and commissions in respect of its income and expenditure as admitted in the preceding years and offered for assessment. This sum of Rs. 9,84,720 was admittedly one of the items taken into account at the time of adjustment of the partners' accounts in the previous year relevant to the assessment year 1984-85 with corresponding debit to the sundry debtors account. Having passed adjustment entries in the books of the firm in relation to the assessment year 1984-85, the passing of entries in relation to one of the same items again in the assessment year 1986-87 by adjusting the accounts of the partners is obviously erroneous resulting in duplication. If the intention was to take the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X
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