1986 (3) TMI 99 - AT - Income Tax

Summary

Issues:
1. Disallowance of vehicle expenses for personal use by directors.
2. Appealability under section 246(1) for assessment years 1980-81 to 1982-83.

Analysis:

1. The first issue pertains to the disallowance of Rs. 4,000 out of vehicle expenses for personal use by directors for the assessment year 1979-80. The Income Tax Officer (ITO) disallowed this amount from the total expenditure of Rs. 33,441. The authorized representative argued that the disallowance should be restricted to Rs. 2,500 based on the previous year's disallowance of Rs. 2,400. The Tribunal decided to limit the addition to Rs. 2,500 for the current year, differing from the ITO's disallowance.

2. The second issue revolves around the appealability under section 246(1) for the assessment years 1980-81 to 1982-83. The Commissioner of Income Tax (Appeals) (CIT(A)) held that no appeal lay as the assessee did not file objections under section 144B(2) to the draft assessment orders. The CIT(A) presumed the assessee's agreement with the proposed additions due to the absence of objections. However, the Tribunal disagreed with this interpretation, citing the decision in ITO vs. Sippy Films. The Tribunal emphasized that the right of appeal is a statutory right and cannot be curtailed unless expressly provided. Silence on objections does not equate to acceptance of the assessment. Therefore, the Tribunal held that the appeals were maintainable and directed the CIT(A) to consider the grounds raised by the assessee for the respective assessment years.

In conclusion, the appeal for the assessment year 1979-80 was partly allowed, while the appeals for the assessment years 1980-81 to 1982-83 were allowed for statistical purposes.