1977 (1) TMI 68 - AT - Income Tax

Summary

Issues:
1. Competence of appeals before the Appellate Assistant Commissioner of Income Tax.

Analysis:
The judgment involves appeals filed by the department for the assessment year 1971-72, challenging the cancellation of the assessment order by the Additional Commissioner of Income Tax. The Additional Commissioner directed the Income Tax Officer to include the income of various firms in the total income of the respondent firm. The Tribunal set aside the Additional Commissioner's order and restored the original order of the Income Tax Officer. Subsequently, the Income Tax Officer included the income of other firms in the total income of different respondents. The department filed appeals before the Appellate Assistant Commissioner against the orders of the first appellate authority. The department raised objections on the competence of these appeals, arguing that since appeals were pending before the Tribunal, the appeals before the Appellate Assistant Commissioner were incompetent.

The department's objection was based on a Supreme Court decision in a similar case where an appeal was dismissed by the Appellate Assistant Commissioner, and the assessee filed a miscellaneous application before the Tribunal, which was deemed incompetent. However, the Tribunal's decision in the present case was different. The Tribunal's decision was based on the Calcutta High Court ruling, which supported the competence of appeals before the Appellate Assistant Commissioner. The High Court held that the statutory right of appeal cannot be nullified by procedural formalities, and the assessee had the right to appeal against the order under the Income Tax Act, even if other appeals were pending before the Tribunal. The department's concern about parallel remedies for the assessee was deemed unsubstantiated, as the assessee would have to withdraw appeals if the Tribunal upheld the Commissioner's order.

Ultimately, the judgment dismissed the department's appeals, affirming the competence of the appeals before the Appellate Assistant Commissioner. The decision was based on the principle that the statutory right of appeal should not be compromised by procedural technicalities, allowing the assessee to pursue appeals at different levels simultaneously.