TMI Blog2003 (3) TMI 278X X X X Extracts X X X X X X X X Extracts X X X X ..... n and general use when a reference is made to the CIT (Appeals) and the Tribunal. 3. A special procedure for assessment of search cases was evolved by inserting Chapter XIV.-B consisting of sections 158B to 158BH, inserted by the Finance Act, 1995 with effect from1st July, 1995. This newly inserted Chapter pertained to the assessment of search cases where: (i) A search was initiated under section 132; or (ii) The books of account, other documents or any assets were requistioned under section 132A; on or after1st July, 1995. For purposes of disposing of the present reference before us, we need not refer to the numerous sections vis-a-vis the said Chapter XIV-B, but would straightaway go to section 158BG and which describes the authority competent to make the block assessment under the said Chapter. We in fact reproduce the said section as it stands today:-- "158BG. The order of assessment for the block period shall be passed by an Assessing Officer not below the rank of an Assistant Commissioner [or Deputy Commissioner] or an Assistant Director [or Deputy Director], as the case may be: Provided that no such order shall be passed without the previous approval of- (a) th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the hierarchical changes in the Income-tax Department the first appeal against a block assessment reverted back to the CIT (Appeals). 6. Before we come to the arguments of the parties, we find it necessary to mention that Chapter XX contains various parts i.e. A to E and the main heading is "Appeals and Revision". Part A deals with appeals to the Dy. Commissioner (Appeals) and Commissioner (Appeals), Part B deals with the appeals to the Appellate Tribunal, Part C deals with references to High Court, Part CC deals with appeals to High Court, Part D deals with the appeals to the Supreme Court and lastly, Part E pertains to revisions to the Commissioner under section 263 and section 264. 7. We would also like to reproduce section 249(4) which finds place in section A of Chapter XX dealing with appeals to the Dy. Commissioner (Appeals)/CIT (Appeals) as follows:-- "[(4) No appeal under the Chapter shall be admitted unless at the time of filing of the appeal,-- (a) where a return has been filed by the assessee, the assessee has paid the tax due on the income returned by him; or (b) where no return has been filed by the assessee, the assessee has paid an amount equal to the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before us and the learned counsel on behalf of the appellant, at the outset, contended that provisions of section 253(1)(b) appeared in Part B of Chapter XX and which gave the power to the Tribunal to hear a first appeal on the orders passed in block assessment by the Assessing Officer during the period 1st July, 1995 to 31st December, 1996. Coming to section 249(4) itself the learned counsel emphasized that the words used were "this Chapter" and which referred to appeals to the CIT (Appeals) who had also been empowered to grant exemption in respect of situations falling in clause (b) in terms of the proviso to section 249(4). It was further emphasized by the learned counsel that the provisions of section 249(4) had not been extended to the Tribunal whose powers were separately defined in Part B of Chapter XX. According to the learned counsel there was an apparent difference between a regular assessment and a block assessment pursuant to search and seizure since in the case of the former an assessee was expected to pay up his taxes on the returned income whereas in the case of the latter, the Department was more than likely to be in possession of assets such as cash, jewellery, sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... half of the Department, we would like to mention that during the course of the hearing of the present reference the learned counsel proceeded at one stage to go to the merits of the case contending before the Tribunal that the amount seized by the Department be treated as payment of tax on the returned income, but we cautioned him not to proceed in this direction since the present Special Bench was to decide only the question of law proposed for its consideration and nothing more. As this aspect of the matter can be taken care of by the Division Bench after the present reference is disposed of, we need not say anything on the submissions made and nor do we propose to deal with the authorities cited in respect of the aforesaid submissions. The only other submission on the part of the learned counsel was that the rule of consistency be kept in mind before taking a decision and by this he probably had in mind the decisions of the Tribunal, which had taken a view in favour of the assessee. The learned counsel also made a statement before us to the effect that the unreported decision of the Tribunal in the case of Jai Bhagwan Aggarwal which had been mentioned in the reference for consti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty. Their Lordships of the Hon'ble Supreme Court were dealing with the question of capital gains on the transfer of goodwill initially generated in a business and the main point connected thereto was whether capital gains were exigible in respect of an asset for which there was no cost of acquisition. It was with reference to the aforesaid point that their Lordships took the view that a charging section and a computation provision constituted an integrated code. The learned Departmental Representative on the basis of the aforesaid judgment wants to convey a view that all Parts of Chapter XX i.e. A to E should be considered as an integrated code and what is stated in one should be read in the other as well. By this we mean the specific issue before us i.e. whether provisions of section 249(4) are applicable to first appeals filed before the Tribunal. To go a little further it is the stand of the Department that what is stated in Part A should apply to Part B, Part C and thereafter Parts to D and E and vice versa, but this argument, in our opinion, falls to the ground. 19. Coming to the decision in the case of Gurupad Khandappa Magdum the question pertains to the determination of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. The unreported decision in the case of Jai Bhagwan Aggarwal of the Delhi Bench upholding the decision of the Ahmedabad Bench by an obiter is stated to have become final and this statement made by the learned counsel for the appellant remains unchallenged on the part of the learned Departmental Representative. In other words, the situation that has emerged is that the decisions which are in favour of the assessee are more in number as against the solitary decision of the Madras Bench, which is stated to be in favour of the Revenue since in the other decision of the same Bench the Members differed on the applicability of section 249(4) to the first appeals filed before the Tribunal, but the conclusion was the same. 21. The other decision relied upon by the learned Departmental Representative was J.H. Gotla's case which deals with the question of interpretation of statutes and their Lordships stressed the necessity of an equitable construction where a strict literal construction led to injustice or an absurd result. This decision, in our opinion, is not at all applicable to the facts of the present case as the subsequent discussion would show and our comments in the ea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee did not feel the necessity to introduce provision similar to the one as in section 249(4). The lawmakers had placed stages of appeal is individual parts and there is no indication made by them that any portion of the enactment of any part is to extend to or govern another part containing appeal procedures. It is clear without any shade of doubt that the provisions grouped in each part of Chapter XX are meant to be applicable within that part and not to travel into other parts of said Chapter. The legislative intent in introducing section 249(4) was to ensure that the appeals before the Deputy Commissioner (Appeals) are filed only on payment of tax on returned income. Filing of an appeal before the Deputy Commissioner (Appeals) has not been categorized anywhere in the Act as 'filing of first appeal' and filing of appeal before the Tribunal as 'filing of second appeal' but there is recognition of hierarchy of judicial forums like the Commissioner (Appeals) or the Deputy Commissioner (Appeals) the Tribunal, the High Court and the stages of movement of appeal are from the Commissioner (Appeals) or the Deputy Commissioner (Appeals) to the Tribunal and from the Tribunal to the High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of section 249(4) cannot be applied for filing of appeals before the Tribunal. Before the introduction of Chapter XIV-B w.e.f.1st July, 1995, there was no provision for filing first appeals directly to the Tribunal. When Chapter XIV-B was introduced, corresponding clause (b) was also inserted in section 253 by which first appeal against the orders under section 158-BC was required to be filed directly with the Tribunal. It seems that when these amendments were made corresponding provision of section 249(4) was omitted to be inserted in Part-B of Chapter XX. It is not the duty of Courts to fill up omissions. Other view could be that legislature intentionally did not insert provision equivalent to section 249(4) in Part B of the Chapter XX." 26. A similar view was expressed by the Ahmedabad Bench of the Tribunal in the case of Nalin Doshi. 27. We are also in agreement with the learned counsel for the appellant when he contends that a distinction was to be kept between the regular assessment proceedings and the block assessment proceedings since the latter the availability with the Department of seized assets in the form of movables and immovables was likely to be stro ..... 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