2010 (6) TMI 840 - AT - Income Tax

Summary

Issues involved: Appeal against order of CIT(A) regarding maintainability of appeal u/s 248 of the Income Tax Act, 1961.

Summary:
The appeal before the Appellate Tribunal ITAT Mumbai pertained to the assessment year 2007-08 and challenged the CIT(A)'s order deeming the appeal by the assessee as not maintainable. The assessee, a company, had entered into an agreement with a Japanese company, NumeriX Japan Co. Ltd., and remitted US$ 1,50,000 after deducting tax under section 195 of the Income Tax Act, 1961. The CIT(A) dismissed the appeal citing non-approach to the Assessing Officer for a certificate under section 195(2) as a prerequisite for filing an appeal under section 248. The Appellate Tribunal noted that section 248 allows an appeal by a person denying liability to deduct tax without requiring a specific order by the Assessing Officer. The liability to deduct tax under section 195(1) is self-imposed and does not hinge on an order by tax authorities. Therefore, the appeal under section 248 was deemed maintainable, contrary to the CIT(A)'s ruling.

The Tribunal distinguished a previous case involving Mahindra & Mahindra Ltd., emphasizing that the present appeal concerned the denial of liability to deduct tax under section 195(1), not the validity of a Chartered Accountant's certificate. The Tribunal set aside the CIT(A)'s order and remanded the appeal for consideration on its merits. The Tribunal allowed the assessee's appeal with no costs awarded.

In conclusion, the Appellate Tribunal ITAT Mumbai ruled in favor of the assessee, holding that the appeal under section 248 was maintainable despite the absence of a specific order by the Assessing Officer. The Tribunal emphasized the self-imposed liability to deduct tax under section 195(1) and directed the CIT(A) to reconsider the appeal on its merits.