TMI Blog1947 (11) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of the Act, the relevant portions of which it is convenient to set out. They are the following:- Section 10A(1).―Where the Excess Profits Tax Officer is of opinion that the main purpose for which any transaction or transactions was or were effected......was the avoidance or reduction of liability to excess profits tax, he may......make such adjustments as respects liability to excess profits tax as he considers appropriate so as to counteract the avoidance or reduction of liability to excess profits tax which would otherwise be effected by the transaction or transactions. (2) Without prejudice to the generality of the powers conferred by sub-section (1), the powers conferred thereby extend- (a) to the charging with excess profits tax of persons who, but for the adjustments, would not be chargeable with any tax or would not be chargeable to the same extent; (b) to the charging of a greater amount of tax than would be chargeable but for the adjustments. (3) Any person aggrieved by a decision of the Excess Profits Tax Officer under this section may appeal in the prescribed time and manner to the Appellate Tribunal. Section 14(1).―The Excess P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment until either the period has expired during which an appeal against his decision can be preferred or, if there is such appeal, the appeal has received disposal by the appellate authority. Section 10A was inserted in the Act by the Excess Profits Tax (Second Amendment) Act, 1941. The incident of subsequent addition can have no special significance when construing its meaning and effect; it must be construed as one of the provisions contained in the Act and as if it had always formed part of it. Prior to 30th September, 1941, the assessees carried on business as dealers in yarn and piece-goods; on the above date the yarn part of their business, with its stock, goodwill and customers was transferred to one Dhirajlal Vithalji, a son of one of the partners in the assessee firm. Dhirajlal carried on the yarn business in the same premises as theretofore. Since the assessable amount of the profits made by Dhirajlal, during the year of account following the transaction of transfer, was less than ₹ 36,000 he was not chargeable to excess profits tax upon that profit; but if the yarn business had not been transferred and had remained part of the undertaking of the assessees, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer's conclusion that the transfer of their yarn business to Dhirajlal was to avoid payment of excess profits tax upon the profits derived from it, and requesting that the addition of Dhirajlal's profit of ₹ 23,282 should be deleted and their tax reduced accordingly. The correctness of that amount, as accurately representing the assessable profit, was not challenged. On 28th February, 1944, the appeal came before the Appellate Assistant Commissioner; he observed that he had no jurisdiction to entertain the appeal, but the appeal was kept pending. On 2nd March, 1944, the assessees preferred an appeal under Section 10A(3) to the Appellate Tribunal in regard to the same subject-matter as in the other appeal; on 12th August, 1944, the assessees, through their advocate, petitioned for withdrawal of the appeal, stating that the matters concerned had been properly raised in the appeal under Section 17(1) and should be decided therein; on 16th August, the appeal under Section 10A(3) was allowed to be withdrawn and it was dismissed by the Tribunal. Incidentally that appeal had been preferred after the expiration of the period during which such an appeal could be made and, con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excess profits tax, any person aggrieved has solely a right of appeal direct to the Appellate Tribunal under sub-section (3) of that section, or, in addition, he has a right of appeal to the Appellate Assistant Commissioner under Section 17(1) and from his decision a further right of appeal to the Appellate Tribunal under Section 19(2). Shortly, whether the Act has conferred concurrent rights of appeal in the instance above-mentioned. It is conceded that if there is a right of appeal under Section 17(1), it will follow that there is the further right of appeal under Section 19(2). If an enactment is capable of two constructions, one of which leads to an absurdity and the other does not, the latter construction should . ** prevail; a construction which leads to an absurdity should, if possible, be avoided. There is a general rule that where a special provision and a general provision are contained in the same statute, a case falling within the words of the special provision must be governed by it and not by the terms of the general provision (per Quain, J., at page 232 in Dryden v. Overseers of Putney [1876] L.R. 1 Exch. 223). Section 10A(3) conferring a right of appeal to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with excess profits tax by means of the assessment made upon him. Sub-section (1) of Section 10A empowers an Excess Profits Tax Officer to make such adjustments, as he considers appropriate, respecting liability to excess profits tax for the purpose of counteracting avoidance or reduction of liability to tax; sub-section (2)(a) declares that the officer's powers, under sub-section (1), include power to charge any person affected by the section with excess profits tax. That charging must be by means of an assessment and the act of charging involves a decision in that behalf made by the Excess Profits Tax Officer by whom it is effected. Sub-section (3) provides for a special right of appeal against a decision by such officer under Section 10A. The several exceptions contained in the two provisos to sub-section (1) of Section 17 do not deal with any matters directly relating to charging with tax or the making of an assessment, but, as pointed out, with matters anterior thereto. The incident of the inclusion of those exceptions connected with matters, different to the matters in Section 10A, does not, in my view, manifest either an intention that the right of appeal conferred b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ircumstances arising in the present reference. PATANJALI SASTRI, J.―I agree that the questions referred to us should be answered in the affirmative. I wish, however, to guard myself against being understood as holding that in no circumstances can an assessee have a concurrent right of appeal under Section 10A(3) and Section 17(1) of the Excess Profits Tax Act, 1940. Whether he is entitled to appeal under the one or the other or both of those provisions depends, in my opinion, on the grounds on which he seeks to attack the order of the Excess Profits Tax Officer. An assessment to excess profits tax involves a preliminary determination of various specific matters which affect the amount of tax payable by the assessee, and the Act has provided for appeals against the decisions of the Excess Profits Tax Officer in respect of these matters to different appellate authorities which, in the opinion of the Legislature, are specially qualified to deal with such matters, while a general right of appeal against the assessments made by that officer is conferred under Section 17(1). Thus, in matters arising under Section 8, sub-sections (5) and (8), and Rule 11 of the First Schedule, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f an assessment made...under sub-section (1) of Section 14 of the Act, and that form refers to the amount of profits liable to excess profits tax as determined by the officer and requires the petitioner to state the amount of profits liable to tax according to his claim. These provisions throw light on the respective scope of the appeals under Section 10A and Section 17 making it clear that an appeal under Section 10A is concerned solely with the adjustment made by the Excess Profits Tax Officer on the basis that the main purpose of a transaction or transactions effected by the assessee was the avoidance or reduction of liability to excess profits tax, while objections to the amount as assessed by that officer fall within the purview of an appeal under Section 17. Thus appeals under Sections 10A(3) and 17(1) are mutually exclusive in scope, though they may be concurrent in the sense that both may be open to an assessee in a given case. It is true and this is the sheet anchor of the argument on behalf of the assessees that while certain of the specific matters in respect of which special rights of appeal are provided for elsewhere in the Act are excepted under the second pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
