1947 (11) TMI 8 - HC - Income Tax

Summary

Issues Involved:
1. Whether the appeal from an order by the Excess Profits Tax Officer lay to the Tribunal only.
2. Whether the Tribunal was right in holding that the appeal filed by the appellants against the order of the Appellate Assistant Commissioner was misconceived and whether the consequent dismissal of the appeal by the Tribunal was right in law.

Issue-wise Detailed Analysis:

1. Appeal from an Order by the Excess Profits Tax Officer:
The primary issue is whether an appeal against a decision by the Excess Profits Tax Officer under Section 10A of the Indian Excess Profits Tax Act, 1940, lies solely to the Appellate Tribunal or if there are concurrent rights of appeal under Section 17(1) to the Appellate Assistant Commissioner and then to the Tribunal under Section 19(2).

The court elucidated that Section 10A(3) confers a special right of appeal directly to the Appellate Tribunal, which should prevail over the general right of appeal under Section 17(1). This principle is based on the general rule that a special provision in a statute overrides a general provision when both are present. The court held that the special right of appeal under Section 10A(3) excludes the general right of appeal under Section 17(1) in cases covered by Section 10A.

The court also addressed the argument that the absence of an explicit exclusion in Section 17(1) for matters under Section 10A implies a concurrent right of appeal. It was determined that this omission does not indicate legislative intent to allow concurrent appeals, as the general scheme of the Act does not support such an interpretation. The court concluded that allowing concurrent appeals would lead to the absurdity of having two appeals on the same matter to the same Tribunal, which could not have been the Legislature's intention.

2. Tribunal's Decision on the Appeal Filed by the Appellants:
The second issue revolves around whether the Tribunal was correct in dismissing the appeal filed by the appellants against the order of the Appellate Assistant Commissioner as misconceived.

The court examined the grounds of the appellants' appeal and found that the appeal was fundamentally against the Excess Profits Tax Officer's decision under Section 10A, which concluded that the main purpose of the transaction was to avoid or reduce liability to excess profits tax. The court highlighted that the appeal was not against the amount of tax assessed per se but against the Officer's decision regarding the purpose of the transaction.

The court emphasized that the right of appeal under Section 10A(3) is concerned solely with the adjustments made by the Excess Profits Tax Officer under Section 10A. In contrast, an appeal under Section 17(1) pertains to objections against the amount of tax as assessed. Therefore, the appeals under Sections 10A(3) and 17(1) are mutually exclusive in scope, even though they may be concurrent in the sense that both may be open to an assessee in a given case.

The court concluded that the Tribunal was correct in holding that the appeal to the Appellate Assistant Commissioner was misconceived and that the dismissal of the appeal was right in law. The Tribunal's decision was based on the fact that the appeal under Section 10A(3) had already been withdrawn and dismissed, and the appeal under Section 17(1) was not competent for matters arising under Section 10A.

Conclusion:
The court answered both questions in the affirmative, affirming that the appeal from the Excess Profits Tax Officer's order lay solely to the Tribunal and that the Tribunal was right in dismissing the appeal against the Appellate Assistant Commissioner's order as misconceived. The Commissioner of Income-tax was entitled to costs of Rs. 250.