1976 (4) TMI 85 - AT - Income Tax

Summary

Issues Involved:
1. Jurisdiction of the Tribunal to entertain an appeal against the order of the Deputy Commissioner of Income Tax (Dy. CIT).
2. Refusal of the Dy. CIT to exercise suo motu powers under Section 32 of the Tamil Nadu General Sales-tax Act.
3. Applicability of Section 32(2) bar against revising orders that have been the subject of an appeal.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Tribunal:
The Tribunal consistently held that it lacks jurisdiction to entertain an appeal against the Dy. CIT's order if such order does not place the appellant in a worse position than the original assessment order. This view is supported by the Privy Council's decision in the Tribune Trust case under the analogous Indian IT Act, 1922. The Tribunal reinforced this stance by stating that the words "an order passed by the Dy. CIT" under Section 36(1) of the Tamil Nadu General Sales-tax Act refer to orders that aggrieve the taxpayer by worsening their position. The Tribunal cited its previous decisions in TA 42/71 and TA 206/74 to support this interpretation, emphasizing that it does not possess constitutional powers akin to those under Article 226 of the Constitution.

2. Refusal of the Dy. CIT to Exercise Suo Motu Powers:
The Tribunal referenced the Supreme Court's decision in Bombay Ammonia Pvt. Ltd. vs. State of Tamil Nadu, which approved the Dy. CIT's exercise of suo motu power under Section 32 but also justified the refusal to exercise revisional jurisdiction when the taxpayer did not file appeals in the regular course. The Tribunal noted that even if it had the power to entertain the appeal, it could not conclude that the Dy. CIT was incorrect in declining to exercise his jurisdiction. The Tribunal also highlighted that the appellant's claim for a lower tax rate was not distinguishable from the facts of the Bombay Ammonia case.

3. Applicability of Section 32(2) Bar:
The Tribunal pointed out that both impugned orders had been the subject of appeals before the Assistant Appellate Commissioner (AAC) on different issues. Section 32(2) categorically bars the Dy. CIT from passing any order if the order has been made the subject of an appeal to the AAC. The Tribunal cited the Madras High Court's decision in State of Madras vs. The India Coffee Board, which held that an order of assessment is a single entity subject to appeal by the taxpayer, and the State has a limited right to seek revisions. This interpretation was affirmed in the High Court case of C. Gnanasundara Nayagar vs. CIT, where it was determined that the word "order" refers to the entire order appealed against, not specific issues within it. The Tribunal also referenced its decision in TA 46/75, where it found that the Dy. CIT's attempt to enhance turnover on an issue not appealed to the AAC was contrary to law due to the clear wording of Section 32(2).

Conclusion:
The Tribunal dismissed the appeals on the grounds that it lacked jurisdiction to entertain them, the Dy. CIT was justified in refusing to exercise suo motu powers, and the bar under Section 32(2) prevented the Dy. CIT from revising orders that had been the subject of an appeal. The Tribunal did not address the merits of the issues raised in the appeals due to these jurisdictional and procedural bars.