2019 (1) TMI 1278 - HC - Income Tax

Review petition - Right given to a partner to file an appeal under Section 247 - no appearance for the respondent - Held that - Single Judge noticed that the Revenue had already approached the Tribunal against the order of the first appellate authority in the appeal filed by the Partner and, hence, directed the Tribunal to consider whether the appeal was maintainable before the first appellate authority. The Tribunal considered the appeal filed by the Revenue, by Annexure-J order dated 06.01.2012. As noticed from Annexure-J, the date of hearing was 03.01.2012. We see from the order of the Tribunal that though an objection was raised with respect to the maintainability of the appeal by the Revenue before the Tribunal, on the very same grounds as raised in the Review Petition, the Tribunal refused to consider the same since the High Court had already directed consideration on merits. It is unfortunate that the Revenue did not place the order of the learned Single Judge in the Review Petition passed six years prior, before the Tribunal. The learned Senior Counsel, Government of India (Taxes) would submit that since the CIT (Appeals) at the second instance had acted without jurisdiction, the order is non est in law. No reason to hold so in an appeal since the Revenue has not raised such contentions before the first appellate authority or before the Tribunal nor even before this Court in the Review Petition. The original demand as is revealed from Annexure-C was only ₹ 15,02,720/-, which is far lesser than that prescribed in the litigation policy. The appeal is one of the year 2012 and though the appeal stood admitted in 2012 itself, there was no appearance for the respondent since notice was not served. Paper publication was taken out only in 2018. We are of the opinion that this is a fit case to be rejected on the ground of litigation policy

Summary

Issues:
1. Appeal against assessment order dismissed for non-payment of admitted tax without consideration on merits.
2. Dispute regarding the respondent's partnership in the firm.
3. Validity of subsequent appeal filed by the partner after the firm's appeal was rejected.
4. Omission of partner's right to appeal under Section 247 of the Income Tax Act, 1961.
5. Tribunal's refusal to consider appeal's maintainability based on High Court's direction to consider merits.

Analysis:
1. The respondent, alleged to be a partner of a firm, had an assessment order passed against the firm, leading to an appeal dismissed solely due to non-payment of admitted tax without any consideration on merits.

2. The respondent, facing recovery proceedings as a partner, denied partnership to halt proceedings, filing a writ petition and another appeal challenging the assessment order, which was later disposed of with quantum adjustments.

3. The Revenue contested the subsequent appeal by the partner, arguing that the firm's appeal rejection barred another appeal. The Tribunal was directed by the High Court to assess the appeal's maintainability.

4. The Government highlighted the omission of a partner's appeal right under the Income Tax Act, effective from 01.04.1993, but failed to raise this in previous proceedings. The Tribunal proceeded with the appeal without considering this aspect.

5. Despite objections on appeal's maintainability, the Tribunal proceeded as directed by the High Court, without considering the Revenue's contentions on jurisdictional issues. The Court found the original demand amount to be significantly lower than prescribed in the litigation policy, leading to the appeal's rejection on those grounds.

This judgment highlights procedural irregularities, jurisdictional disputes, and the importance of raising relevant legal points at the appropriate stages of the legal process to ensure a fair and just resolution.