2001 (11) TMI 236 - AT - Income Tax

Summary

Issues Involved:
1. Maintainability of appeals due to non-payment of admitted tax.
2. Status of the assessee as an aggrieved party.
3. Impact of the Kar Vivad Samadhan Scheme (KVSS) on the appeals.
4. Validity of revised returns filed before the introduction of the proviso to Section 158BC.
5. Effect of consent-based assessments on the right to appeal.

Detailed Analysis:

1. Maintainability of Appeals Due to Non-Payment of Admitted Tax:
The learned senior Departmental Representative argued that the appeals were not maintainable as the assessee had not paid the admitted tax as required under Section 249(4). He emphasized that the assessee is supposed to pay tax on returned income before filing an appeal. However, the Tribunal found that Section 249(4) is not applicable to appeals filed before the Tribunal. The Tribunal disagreed with the Chennai Bench's decision in V. Bhaskaran vs. Asstt. CIT, which supported the Revenue's stance. The Tribunal noted that the legislative intent might have been not to include such a provision for appeals before the Tribunal, and thus, the appeals were maintainable.

2. Status of the Assessee as an Aggrieved Party:
The Department contended that the assessee was not an aggrieved party and thus had no right to file the appeals. The Tribunal agreed with this contention, citing various High Court decisions. It was noted that once an assessment is completed based on the consent of the assessee, the assessee cannot be considered aggrieved and thus cannot appeal. The Tribunal referenced several cases, including Jivatlal Purtashi vs. CIT and Rameshchandra & Co. vs. CIT, which supported the view that consent-based assessments preclude the right to appeal.

3. Impact of the Kar Vivad Samadhan Scheme (KVSS) on the Appeals:
The Tribunal addressed the preliminary objection regarding the issuance of a certificate under the KVSS. The Department argued that the certificate was obtained based on false particulars, rendering the appeals void ab initio. The Tribunal noted that the appeals were deemed withdrawn under Section 90(4) of the KVSS once the certificate was issued. However, the Tribunal decided to analyze the preliminary objections raised by the Revenue, as the issue was about the competence of filing the appeals, not the KVSS itself.

4. Validity of Revised Returns Filed Before the Introduction of the Proviso to Section 158BC:
The Department pointed out that the right to file revised returns was withdrawn with the proviso to Section 158BC, effective from January 1, 1997. The Tribunal noted that the revised returns filed before this date were valid. The learned authorized representative argued that Chapter XIV-B does not provide for filing revised returns and that the proviso should be considered clarificatory and effective from the introduction of Chapter XIV-B. The Tribunal did not find this argument persuasive and upheld the validity of the revised returns filed before the proviso's introduction.

5. Effect of Consent-Based Assessments on the Right to Appeal:
The Tribunal examined whether the assessee could appeal against assessments made based on their consent. The Tribunal referenced several High Court decisions, including M.M. Annaih vs. CIT and Sterling Machine Tools vs. CIT, which held that consent-based assessments preclude the right to appeal. The Tribunal found that the assessee had agreed to the assessments to avoid more severe consequences like prosecution. The Tribunal concluded that the appeals in IT (SS)A Nos. 84, 85, 86 & 90/Ind/96 were not competent and void ab initio as the assessee had no right to file these appeals. However, for IT(SS)A Nos. 88 & 89/Ind/96, where the assessments were not based on the surrender letter, the preliminary objections were dismissed.

Conclusion:
The Tribunal dismissed IT(SS)A Nos. 84, 85, 86 & 90/Ind/96 as void ab initio, treating them as never filed. IT(SS)A Nos. 88 & 89/Ind/96 were allowed to proceed as the assessments were not based on the surrender letter.