1989 (3) TMI 169 - AT - Income Tax

Issues Involved:
1. Non-consideration of facts and written submissions by the C.I.T. (Appeals).
2. Treatment of Rs. 8700 as advance tax.
3. Right of appeal under section 214.
4. Jurisdiction of the Commissioner of Income-tax under section 264.
5. Binding nature of predecessor C.I.T. (Appeals) order.

Detailed Analysis:

1. Non-consideration of Facts and Written Submissions by the C.I.T. (Appeals):
The appellant argued that the C.I.T. (Appeals) failed to consider all the facts and written submissions presented before him. Specifically, the appellant contended that the C.I.T. (Appeals) should have taken into account the predecessor C.I.T. (Appeals) order dated 28-7-83, which directed that the payment of Rs. 8700 be considered as advance tax.

2. Treatment of Rs. 8700 as Advance Tax:
The primary issue was whether the payment of Rs. 8700 made on 31-3-1977 should be treated as advance tax. The predecessor C.I.T. (Appeals) had directed that this payment be treated as advance tax and that interest under section 214 be allowed. However, the Assessing Officer, following the Commissioner of Income-tax, N.E. Region, Shillong's order under section 264, did not treat this payment as advance tax and thus did not allow interest under section 214.

3. Right of Appeal under Section 214:
The appellant argued that the present C.I.T. (Appeals) erred in not entertaining the ground of appeal concerning the non-allowance of interest under section 214. The appellant maintained that the right to appeal is a substantive right and cannot be lightly ignored. The tribunal noted that the C.I.T. (Appeals) dismissed the appeal not because it was unappealable but because the issue had been decided by the Commissioner of Income-tax under section 264.

4. Jurisdiction of the Commissioner of Income-tax under Section 264:
The tribunal highlighted that the powers of the Commissioner of Income-tax under section 264 are broad but limited to passing orders favorable to the assessee. It was emphasized that an order under section 264 cannot be prejudicial to the assessee. The tribunal referred to various precedents, including CIT v. Tribune Trust and K.C. Luckose v. ITO, to support the view that the Commissioner of Income-tax's order under section 264 is not conclusive and does not preclude the assessee's right to appeal.

5. Binding Nature of Predecessor C.I.T. (Appeals) Order:
The tribunal observed that the order of the predecessor C.I.T. (Appeals) dated 28-7-83, which directed the payment of Rs. 8700 to be treated as advance tax, should be binding on the Assessing Officer if it had become final and conclusive. The tribunal criticized the present C.I.T. (Appeals) for not verifying whether the predecessor's order had become final and for not considering the merits of the case.

Conclusion:
The tribunal directed the present C.I.T. (Appeals) to verify whether the predecessor C.I.T. (Appeals) order dated 28-7-83 had become final and conclusive. If so, the C.I.T. (Appeals) should treat the payment of Rs. 8700 as advance tax and allow interest under section 214. The tribunal emphasized that the Assessing Officer cannot ignore the directions of higher authorities and must give effect to orders that are operative and final. The appeal by the assessee was allowed for statistical purposes, and the matter was remanded to the C.I.T. (Appeals) for fresh disposal in accordance with the law.

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