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TMI Blog2008 (12) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 cost of acquisition as 'Nil' and declared the income received as long term capital gains and paid the taxes accordingly. Respondent No.1, the Deputy Commissioner of Income-tax, thereafter, passed an order under section 143 (1)(a) of the Act and sent intimation along with the notice of demand including interest calculated in the sum o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing 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 for taxation and paid the taxes. (b) The Commissioner of Income-tax (Appeals) erred in not appreciating the fact that section 246 (1) (a) itself provides that the assessee is entitled to file an Appeal in case where he denies his liability to be assessed under this Act i.e. particular item of income and in the present appeal even though the assessee hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 appeal is not provided for under the statute against the intimation, Commissioner of Income-tax (Appeals) could not have entertained the subject appeal at the instance of the present assessee. In his submission the Tribunal was perfectly justified in upholding the order of the Appellate Authority and holding that the Appeal was not maintainable at the instance of the Assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment 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 proposed to amend the Explanation occurring at the end of Section 143 to provide that an intimation sent to the assessee under sub section (1) or sub-section (1B) shall also be deemed to be an order for the purposes of section 246 which deals with the first appeal against the orders of an Assessing Officer." 23. The memo explaining the provisions in Finance Bill 1994 relating to the amendment leading to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 to the assessment for the assessment year 1995-96 was very much maintainable in view of the explanation till its deletion with effect from 1.6.1999. This view of ours is in consonance with the view taken by the Division Bench of this Court (Panaji Bench) in the case of C.I.T. v. Anderson Marine and Sons Pvt. Ltd. (2004) 266 ITR 694. We do not propose to address the question relating to the effect of deletion of the explanation w.e.f. 1.6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 estoppel against the statute. Article 265 of the Constitution of India in unmistakable terms provides that no tax shall be levied or collected except by authority of law. Acquiescence cannot take away from a party the relief that he is entitled to where the tax is levied or collected without authority of law. In the case on hand, it was obligatory on the part of the Assessing Officer to apply his mind to the facts disclosed in the return and assess the assessee keeping in mind the law holding the field. 35. On ..... X X X X Extracts X X X X X X X X Extracts X X X X
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