TMI Blog2008 (12) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax Appellate Tribunal, Mumbai Bench 'D' Mumbai, (the Tribunal for short ). The Issue: 3. The substantial question of law involved in the appeal is as under:- "Whether on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in holding that no appeal lies against the order of intimation under section 246 of the Act and that the order under section 143 (1)(a) is limited to the adjustment made by the Assessing Officer and the said adjustment does not include denial of tax liability by the assessee and that additional ground leading to tax liability of capital gain does not arise from the order of the Commissioner of Income-tax (Appeals)? Factual Panorama 4. The factual panorama is that the Appellant is an individual and assessed to tax. The year under consideration is the financial year 1995-96. The Appellant filed his Income-tax return for the assessment year 1996-97 declaring total income of Rs. 1,04,86,080 which included an amount of long term capital gains of Rs.1,07,00,000 on account of sale of godown situated at Chaya Building, Dadar Mumbai-28. 5. The appellant, while declaring the capital gains, showed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llate stage. He, thus, refused to entertain the ground of taxability of capital gains in respect of an assessment completed under section 143 (1) (a) of the Act. In the result, the appeal was dismissed. 8. So far as the second ground raised in the memo appeal is concerned, the same was entertained and the appeal to that extent was allowed. The Assessing Officer (AO) in turn was directed to recalculate interest, if any, payable under section 234 (c) considering the fact that it may not be chargeable in respect of the capital gains. 9. Being aggrieved by the aforesaid order of the Commissioner of Income-tax (Appeals), the Appellant preferred appeal before the Tribunal without success raising the following grounds: (a) The Commissioner of Income-tax (Appeals) erred in not admitting the ground of Appeal about the taxability of capital gain. The Commissioner of Income-tax (Appeals) failed to appreciate that the order passed under Section 143 (1)(a) of the Act is an assessment order and as such the Appellant is not estopped in raising a ground of taxability of the income which goes to the root of the matter in spite of the fact that the assessee himself offered the said income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n referred in the said Section. 14. Mr Sathe reiterated that if a particular item of income is not taxable in the eye of law and if the assessee is desirous of challenging such imposition of illegal tax then he cannot be deprived of his right to approach higher forum through the appellate door. He, thus, submits that the impugned order of the Tribunal is unsustainable in law. He placed reliance on the number of judgments in support of his submissions which need no reference at this stage, since relevant judgments are being referred in the later part of the judgment while considering rival submissions. 15. Per contra, Mr Chatterjee learned counsel appearing for the Revenue urged that the Assessee had filed the return which was voluntary. It was merely accepted by the Assessing Officer and sent intimation under Section 143 (1)(a) of the Act, which indicated mere acceptance of return without there being any order of assessment. He submits that no appeal was maintainable under the Act against such intimation. In his submission, the subject appeal was rightly rejected as not maintainable. 16. Mr Chatterjee submits that the right of appeal is a creature of statute. Since the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... status under which he is assessed;......." (Emphasis supplied) 21. Section 143 (1) of the unamended Act, which prevailed up to the assessment year 1988-89 was as under:- 143 Assessment. - (1) (a) Where a return has been made under Section 139, the Assessing Officer may, without requiring the presence of the Assessee or the production by him of any evidence in support of the return, make an assessment of the total income or loss of the assessee after making such adjustments to the income or loss declared in the return as are required to be made under clause (b) with reference to the return and the accounts and documents, if any, accompanying it, and for the purposes of adjustments referred to in sub clause (iv) of clause (b), also with reference to the record of the assessments, if any, of past years, and determine the sum payable by the assessee or refundable to him on the basis of such assessment." 22. The above statutory provision of section 143(1) was amended w.e.f. 1.4.1989 applicable for the assessment year 1989-90 and subsequent years. The Clause 37 by which the above Section 143 was amended reads as under (See [1994] 206 ITR (St.) 150): Clause (37) :- "It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t as well as various other High Courts. The question at issue is regarding right of appeal. It is true that there is no inherent right of appeal to any Assessee and it has to be spelt out from the words of the statute, if any, providing for an appeal. But it is an equally well settled proposition of law that, if there is a provision conferring a right of appeal, it should be read in a reasonable, practical and liberal manner. 27. Having said so, let us turn to the provisions holding the field applicable to the relevant assessment year (quoted supra). 28. Section 143 (1) with the explanation would be applicable to the case in hand, since the assessment year in question is 1995-96. The explanation, which was on the statute upto 1.6.1999 till its omission by the Finance Act, 1999 if read in the light of clause 37 and the memo explaining the provision in Finance Bill 1994 extracted hereinabove, would unequivocally go to show that the intimation sent to the Assessee under sub section (1) or sub section 1(B) was deemed to be an order for the purposes of Section 246 and 264. Section 264 deals with appealable orders. If this be so, then the appeal against intimation sent relating t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it by implication and the intention of the legislature has to be gathered from the language used. ( Dayal Singh vs. Union of India ) AIR 2003 SC 1140). 32. Having said so, we must observe that the Apex Court and the various High Courts have ruled that the authorities under the Act are under an obligation to act in accordance with law. Tax can be collected only as provided under the Act. If any assessee, under a mistake, misconceptions or on not being properly instructed is over assessed, the authorities under the Act are required to assist him and ensure that only legitimate taxes due are collected (see S.R. Kosti v CIT (2005) 276 ITR 165 (Guj), C.P.A. Yoosuf v. I.T.O. (1970) 77 ITR 237 (Ker), CIT v. Bharat General Reinsurance Co. Ltd, (1971) 81 ITR 303(Delhi), CIT v. Archana R. Dhanwate (1982) 136 ITR 355 (Bom). 33. If particular levy is not permitted under the Act, tax cannot be levied applying the doctrine of estoppel. (See Dy. Commissioner of Sales Tax v. Sreeni Printers (1987) 67 SCC 279 (Ker). 34. This Court in the case of Nirmala L. Mehta v. A. Balasubramaniam, C.I.T. (2004) 269 ITR 1 has held that there cannot be any esto ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
