TMI Blog1980 (6) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment year 1975-76, in W.P. No. 1289/1980, he had paid advance tax of Rs. 51,966 and tax deducted at source amounted to Rs. 5,580.75. He paid the tax on self-assessment in the sum of Rs. 11,850 making up the total sum of Rs. 69,396.75 before any assessment order was passed for that assessment year. The assessment orders came to be passed, namely, in respect of the assessment year 1973-74 on October 1, 1975, and in respect of the assessment year 1975-76 on August 20, 1976. Aggrieved by certain legal infirmities in the assessment orders, the assessee-petitioner filed two appeals before the AAC which came to be dismissed. Against those orders, he preferred statutory second appeal before the Income-tax Appellate Tribunal, Bangalore Bench, Bangalore, relating to the assessment years 1973-74 and 1975-76 in Appeals Nos. ITA 586 and 588/1977-78. The above two appeals and another appeal filed by the assessee-petitioner concerning the assessment year 1974-75 (with which we are not concerned in these writ petitions) and the Income-tax Appeals Nos. 578 and 598 filed by the respondent-ITO were clubbed together and disposed of by a common order. Several contentions were raised before the Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... K. R. Prasad, learned counsel appearing for the assessee-petitioner, has placed reliance on the decision of a learned single judge in Suburban Bank Ltd., In re (1953] 24 ITR 67; 23 Comp Cas 285 (Cal). In the said case, the learned judge was considering whether the official liquidator of the company was bound to treat as preferential payment the advance income-tax under s. 18A of the Indian I.T. Act, 1922 (corresponding to s. 210 of the I.T. Act, 1961), as against the contentions of the official liquidator that such demand could not be treated as preferential payment. In that context, the learned judge has observed as follows (p. 68): " In my opinion the said sum which was demanded under section 18A of the Income-tax Act was not a tax which became due and payable within the meaning of the said section. It is an amount payable in advance in respect of tax before it became due. It would become due after regular assessment. This in my opinion is the real character of the payment to be made under section 18A of the Income-tax Act. This is also evident from the fact that if on regular assessment nothing or a lesser amount is found due and payable then the Government shall have to retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other hand, Shri S. R. Rajasekhara Murthy, learned counsel appearing for the respondent-ITO (Revenue), has strenuously contended that in the scheme of the Act, the income becomes liable to tax as soon as the charging section is attracted to the case of an individual or a body corporate or other persons liable to pay tax under the Act. It is true the tax legislation, particularly one dealing with income, not only in this country but also in most of the countries, is a highly complicated and long drawn out legislation providing for several contingencies and situations in order to prevent evasion or avoidance of tax to the extent possible. I have already set out earlier that the system of payment of advance tax came to vogue on account of the inflationary tendency created by the second world war and stayed in the statute book as a matter of convenience. Now, therefore, the principal question for determination is as to when the tax can be said to be levied. There is no direct decision of the Supreme Court in so far as the peculiar and extraordinary facts of this case are concerned. However, it is a well-settled principle of interpretation of taxation laws that if more than one view i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that for a good number of reasons the whole of the advance tax paid may become refundable, if the assessee is ultimately found not liable to pay tax after the assessment proceedings are completed. Such a possibility cannot be ruled out. If that be the position, the mere fact of the compulsion of payment under s. 210 of the Act, as contended by Shri Rajasekhara Murthy, cannot be accepted to mean that, by the operation of that section, that tax had been levied, assessed and collected. Assessment is the final process which completes the levy of tax under s. 4 of the Act. This leads me to examine the question as to what is the effect of assessments made in the case of the petitioner for the two relevant assessment years, his appeals to the AAC and subsequently the annulment of those assessments by the Income-tax Appellate Tribunal. As rightly contended by Shri Prasad, the Appellate Tribunal which had the jurisdiction and the power vested in it to set aside the assessment, has annulled it. The affect of annulment is that there is no assessment at all in the eye of law. If the revenue was aggrieved by that order, the Act provides adequate remedies to rectify any error committed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. That decision was rendered by a learned single judge of that High Court. The matter arose under the Excess Profits Tax Act. But nevertheless the High Court had to consider the question of making a refund on demand by virtue of the success of the party in appeal in the Supreme Court. It was argued by the learned counsel appearing for the writ petitioners therein that refund was not being claimed under the provisions of the Act relating to refund, but it was claimed under the provision made in s. 21 of the Excess Profits Tax Act read with s. 66A of the Indian I.T. Act, 1922, which enjoined the revenue to carry into effect the decisions of the High Court or the Supreme Court. Similarly, in the instant case, under the Act, s. 254 provides for two things. Under sub-s. (3) of that section, the Appellate Tribunal shall send a copy of any Order passed by it under that section to the assessee and to the Commissioner and sub-s. (4) of that section makes the order of the Appellate Tribunal in appeal, final. As earlier stated, nothing was done by the revenue after the assessments in question were annulled by the Tribunal. In the result, there are no assessments at all of the petitioner for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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