Section 246, read with section 143, of the Income-tax Act, 1961 - Commissioner (Appeals) - Appealable orders - Assessment year 1995-96 - Whether so long as Explanation to section 143(1) was on statute up to 1-6-1999 till its omission by Finance Act, 1999, appeal was maintainable against intimation under section 143(1) - Held, yes - Whether if an appeal is not maintainable, it is not maintainable at all and it cannot be said that for a particular ground an appeal is maintainable and for another it is not - Held, yes
Section 143 of the Income-tax Act, 1961 - Assessment - General - Assessment year 1995-96 - Whether tax can be collected only as provided under Act and, therefore, it is obligatory on part of Assessing Officer to apply his mind to facts disclosed in return and assess assessee keeping in mind law holding field - Held, yes
Balmukund Achary vs Deputy Commissioner of Income-tax, Special Range
The assessee filed his return for the relevant assessment year declaring long-term capital gain on account of sale of a godown. While doing so, he had shown the cost of acquisition of the said godown as NIL. The Assessing Officer passed an order under section 143(1)(a) and sent an intimation along with the notice of demand including interest under section 234C. Being aggrieved by the said order, the assessee filed an appeal contending that the Assessing Officer had failed to appreciate that the capital gain was not taxable under section 45 inasmuch as the premises, which was sold by the assessee, had not cost him anything in terms of money and, as such, computation of capital gain was impossible. He also contended that levy of interest under section 234C was not justified as no advance tax was payable by him in case of capital gains. The Commissioner (Appeals) held that no appeal lay under section 246(1)(a) against an intimation sent under section 143(1)(a), since no adjustment had been made by the Assessing Officer and the assessee had, on his own, declared the subject amount as capital gains. However, the Commissioner (Appeals) entertained the assessee’s appeal in respect of interest under section 234C and directed the Assessing Officer to recalculate the same. On second appeal, the Tribunal upheld the order of the Commissioner (Appeals).
On second appeal :
The Explanation to section 143 was omitted by the Finance Act of 1999 with effect from 1-6-1999. Since the case in hand related to the assessment year 1995-96, said Explanation would be very much applicable. [Para 24]
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 a liberal manner. [Para 25]
Section 143(1) with Explanation would be applicable to the instant case, since the assessment year in question was 1995-96. The Explanation, which was on the statute up to 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, would unequivocally go to show that the intimation sent to the assessee under sub-section (1) or sub-section (1B) was deemed to be an order for the purpose of sections 246 and 264. Section 246 deals with appealable orders. If that be so, 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. [Para 27]
Thus, so long as the Explanation was on the statute book, the appeal was very much maintainable against the intimation under section 143(1). [Para 28]
However, 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 due legitimate taxes are collected. [Para 31]
If a particular levy is not permitted under the Act, tax cannot be levied by applying the doctrine of estoppel. [Para 32]
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 instant case, 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. [Para 33]
One more aspect need to be touched while disposing of the appeal. The Commissioner (Appeals) had entertained appeal in part and rejected in part. If the appeal is not maintainable, it is not maintainable at all. It cannot be said that for a particular ground, an appeal is maintainable and for another it is not. Once the appeal is filed and entertained, then all grounds can be raised by the appellant requiring consideration. If the revenue was of the view that an appeal itself was not maintainable before the Commissioner (Appeals), in that event, the order of the Commissioner (Appeals) allowing appeal in part was bad order and that part of the order ought to have been challenged by the revenue. The revenue did not challenge the said order believing maintainability of the appeal. The revenue at that stage could not be allowed to contend otherwise. It could not be allowed to blow hot and cold. Thus, taking an overall view of the matter and for the reasons recorded, the appeal preferred by the assessee was very much maintainable.