1991 (12) TMI 84 - AT - Income Tax

Summary

Issues:
- Appealability of an order passed under section 143(1) of the Income Tax Act.

Analysis:
The judgment dealt with the appeal raising the issue of whether an order passed under section 143(1) of the Income Tax Act is appealable. The appellant argued that the Income Tax Officer (ITO) had levied tax at 20% without considering the provisions of Chapter VI-A or granting basic exemptions, based on the assumption that the appellant had not exercised the option under Chapter XII-A. The appellant contended that the order under section 143(1) was appealable. The appellant relied on precedents from the Madras Bench and the Bombay Bench of the Tribunal to support the appealability of such orders. The Departmental Representative, however, relied on a decision from the Ahmedabad Bench of the Tribunal and the opinions of legal authors to argue against the appealability of orders under section 143(1). The appellant further cited section 246(c) of the Act to support the right to appeal when denying liability to be assessed at a particular rate.

The Tribunal analyzed the arguments presented by both sides and emphasized that the failure to pursue remedies under section 143(2)(b), section 154, or section 264 does not automatically negate the right of appeal under section 246(c) when denying liability to be assessed at a specific rate or in a particular manner. The Tribunal concluded that any incorrect variation in tax liability made under section 143(1) that causes grievance to the appellant can be challenged through an appeal under section 246(c). Therefore, the Tribunal held that the first appellate authority erred in dismissing the appeal and directed the authority to admit the appeal and decide it on its merits. The Tribunal set aside the order of the first appellate authority and restored the case for further proceedings.

In conclusion, the Tribunal allowed the appeal for statistical purposes, highlighting the importance of the right to appeal when denying liability to be taxed at a specific rate, even in cases where the initial assessment was made under section 143(1) of the Income Tax Act.