TMI Blog2013 (12) TMI 1313X X X X Extracts X X X X X X X X Extracts X X X X ..... te payment of Income Tax - Decided partly in favour of Revenue. - Income Tax Appeal No. - 7 of 2002, Income Tax Appeal No. - 8 of 2002 - - - Dated:- 9-8-2012 - Hon'ble Sunil Ambwani And Hon'ble Aditya Nath Mittal,JJ. For the Petitioner : Shambhu Chopra For the Respondent : H. M. Mehrotra,R. R. Agrawal,S. Agrawal ORDER Delivered by Hon'ble Aditya Nath Mittal, J. 1. These appeals have been preferred against the order dated 29.06.2001 and order dated 31.08.2001 passed by the Income Tax Appellate Tribunal (Lucknow Bench) in M.A. No.07/LKO/2001 I.T.A. No.1420/Alld/93 and I.T.A. No.1420 (Alld) of 1992 regarding Assessment Year 1984-85. 2. These appeals were admitted on the following substantial questions of law:- "(1) Whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e could be two conceivable opinion on this point, therefore, Section 154 of the Income Tax Act, 1961 did not have any application. 6. Against this order of Commissioner of Income Tax (Appeals), the revenue filed an appeal before the Income Tax Appellate Tribunal, who by its order dated 17.1.2001 allowed the revenue's appeal with the following observation:- "We have considered the rival submissions. The deductions of tax by Sikkim State from lottery payment is not a tax deducted at source as per the provisions of section 194B, the credit of which could not be given u/s 199 because the Sikkim state did not credit the amount deducted to the account of Government of India. The tax deducted at source is one of the mode of collection of taxes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Manual, 1948 regarding which T.D.S. Certificate was issued to assessee. Article 371-F provides special provisions with respect to the State of Sikkim. Sikkim became 22nd State of the Indian Union by and under the Constitution (36th Amendment Act, 1975 w.e.f. 26.4.1975). 11. The assessee in this case is an individual and is of the status of resident of India. The Assessing Authority in its assessment order dated 27.3.1987 had not given the credit of T.D.S. for Rs.3,68.088/- on the ground that original certificate was not filed. Subsequently an application under Section 154 of the Income Tax Act, 1961 was moved and the Assessing Authority rectified the mistake and allowed the credit of sum of Rs.3,68,088/- being the tax deducted at source ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Act, 1961, did not become applicable to the State of Sikkim, Income-tax Act, 1961, could not be applied to the income earned in Sikkim. In the circumstances, we have no hesitation in holding that the prize money won by the petitioner from the lottery of the Government of Sikkim could have been charged to tax only in accordance with then existing income-tax laws in the State of Sikkim and could not be charged to tax under the Income-tax Act, 1961." 14. This Court in Commissioner of Income Tax Vs. Smt. Susheela Devi Agarwal in I.T. Appeal No.238 of 1999, decided on 24.10.2007 has considered the above referred judgment of Bombay High Court delivered in the case of Nirmala L. Mehta (supra) and has respectfully disagreed with them on the gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he overlooking of a mandatory provision of law which leaves no option or discretion with the taxing authority would amount to commission of a mistake apparent on the face of the record. 19. We find that the Commissioner of Income Tax (Appeals) following the decisions of Anuj (Toffee) Garg Vs. Income Tax Oficer, I.T.A.T. Delhi (S.M.C. Bench) (1990) 84 CTR 83, has held that credit for the tax deducted at source by Sikkim Government has to be allowed. It has further held that in case of Shri Vishnu Kumar Baghel etc., a similar decision has been taken. 20. Regarding this issue as to whether the T.D.S. deducted by Sikkim Government shall be given credit under the Income Tax Act, 1961 or not, the Sikkim Government had clarified the position t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have simply deducted the aforesaid amount as tax. The assessee is assessed at Kanpur and the said income of lottery cannot be said to be an income earned in Sikkim. From the letter of Sikkim Government dated 3.10.1984, it is clear that the remittance was not sent to India because no such agreement exists between Government of Sikkim and Government of India. The benefit of T.D.S. can only be taken if the said amount has been remitted to the Consolidated Fund of India. 24. By allowing credit of T.D.S. by the A.O. in the relevant assessment year, the Assessing Authority had committed a mistake and as per the provisions of Section 154 of the Income Tax Act, 1961 that mistake was rectifiable after giving an opportunity of hearing. The opportun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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