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TMI Blog1984 (9) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... section 246(1)(c) in declining to entertain as maintainable the appeal filed against the order of the ITO under section 230(2). According to the learned counsel the appeal filed by Panam ought to have been entertained by the Commissioner (Appeals) under section 246(1)(c) as Panam was an assessee within the meaning of section 2(7)(c) of the Act, and as it was denying its liability to be assessed under the Act and in particular under the provisions of section 230(2). Referring to the order passed by the ITO under sub-section (2) of section 230 and after analysing these provisions, the learned counsel says that the order passed by the ITO amounted to an assessment in respect of taxes demanded and, therefore, for this reason and for the reason that the amount of tax demanded was determinable by the ITO under sub-section (2) of section 230, the appeal filed by Panam was squarely covered by the provisions of section 246(1)(c). According to him there should have been no doubt about the maintainability of the assessee's appeal within the provisions of section 246(1)(c) and that in any case even if there was any possibility of a doubt the appeal ought to have been entertained by the Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing contrary to the provisions contained in rule 8 of the Income-tax (Appellate Tribunal) Rules, 1963, the appeal should be rejected in limine. Thereafter the learned departmental representative submits that the directions which had been given by the ITO under the provisions of sub-section (1) of section 230 to the Panam not to allow the tax defaulter Dr. Jayanti Dharma Teja to avail of travelling facilities on any of the aircraft belonging to Panam without production of a tax clearance certificate was a valid order and for that he placed reliance on a decision of the Hon'ble Andhra Pradesh High Court in the case of Dr. Jayanti Dharma Teja v. Secretary, Government of India, Ministry of Finance [1984] 148 ITR 316. According to him, a valid direction under section 230(1) having been issued to Panam not to allow Dr. Teja any travel facilities unless he had produced a tax clearance certificate in accordance with section 230(1) and that direction having been flouted and Dr. Teja having been allowed to leave India on one of the Panam flights, the ITO was justified in taking executive action of recovering taxes due from the defaulter from Panam itself in accordance with the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pay the taxes which were due from tax defaulter Dr. Teja who had been allowed to leave India without insisting upon him to produce a tax clearance certificate. The learned departmental representative further submits on the authority of the decision of the Hon'ble Calcutta High Court in the case of Kalinga Air Lines (P.) Ltd. v. ITO [1972] 85 ITR 443 that the matter regarding the issuance of tax clearance certificate is purely an executive matter and, therefore, there was no question of their being an appeal being permissible under the provisions of section 246(1)(c). After making an analysis of the different Chapters of the Act, laying down the procedure of assessment and the procedure of recovery, the learned departmental representative submits that the order passed under section 230(2) on Dr. Teja was not an order of assessment within Chapter XIV of the Act and that it was an order which fell within the Chapter XVII-D of the Act which provides for the various modes of collection and recovery of taxes from assessees who are in default or assessees who are deemed to be in default. In these circumstances, according to Shri Chakraborty, when the liability to tax had been fastened on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liability of income-tax and wealth-tax amounting to Rs. 4,75,24,031 which had not been paid by the defaulting assessee. Since the ITO was of the opinion that Dr. Teja may leave India with an intention of not returning to India, he had intimated the various aircraft carriers operating in India that Dr. Teja should not be allowed to avail of the travel facilities on their aircraft unless a tax clearance certificate had been produced by him. The information sent by the ITO acting under section 230(1) had been duly received by Panam and the fact that this information had been received by them had been duly acknowledged. In spite of that Dr. Teja was allowed to leaveIndiaon14-5-1977on a Panam flight toAmericaen route to Sanjose in Costarica. Panam had allowed the travel facilities to the defaulter without insisting on the production of a tax clearance certificate under section 230(1). For the default committed in the form of allowing a tax defaulter to leave India without producing a tax clearance certificate, a notice was sent to Panam under sub-section (2) of section 230 calling upon them to show cause as to why they should not be proceeded against for recovery of taxes due from Dr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 229 of the Act it has been clarified that any amount imposed by way of interest, fine, penalty, etc., could be recoverable under Chapter XVII as arrears of tax. Thereafter appear the provisions of section 230(1) which provide that no persons whether he is domiciled in India or not shall be allowed to leave the territory of India by land, sea or air unless he produced a tax clearance certificate from the competent authority to the effect that he has no tax liability under the various tax Acts or that satisfactory arrangements have been made for the payment of taxes due from him. The provisions of sub-section (2) of section 230 provide that if the owner or charterer of any ship or aircraft carrying persons from any place in the territory of India to any place outside India allows any person to whom the provisions of sub-section (1) of section 230 apply to leave India without satisfying that such person is in possession of a clearance certificate, he shall be personally liable to pay the whole or any part of the amount of tax payable by such person as the ITO may, having regard to the circumstances of the case, determined. In sub-section (3) of section 230 it has been further provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there can be no right of an appeal unless it is conferred by the statute. If the right of appeal stands conferred by a certain statute then undoubtedly it has to be liberally construed. Now examining the provisions of section 246(1)(c), we find that its dichotomy results in two parts. These arc that any assessee can appeal firstly where he denies his liability to be assessed under the Act, or where the assessee objects to any order of assessment under sub-section (3) of section 143 or section 144 or where he objects to the amount of income assessed or to the amount of tax determined or to the amount of loss computed or to the status under which he is assessed. If an assessee has a grievance against an order passed against him and if that grievance does not fall within any one of the situations mentioned above, then the provisions of section 246(1)(c) will not apply. So far as the second limb of section 246(1)(c) is concerned, it cannot by any stretch of imagination embrace within itself an appeal against an order passed under sub-section (2) of section 230. The learned counsel for the appellant also admits so, but as stated earlier his contention is that the case of the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of various sections mentioned in Chapter XVII-D which finds a mention in the provisions of section 246. That section is section 221, which enables an assessing authority to impose penalty on an assessee who is in default or who is deemed to be in default. In respect of other modes of recovery appeals are provided to the extent that they are mentioned in the Income-tax (Certificate Proceedings) Rules, 1962. A whole code for recovery proceedings has been devised in these Rules and these Rules provide for appeals against the orders of the TRO. As far as an order under section 230(2) is concerned, it does not find a mention any where either in section 246 or in any one of the said rules. But that does not mean that an order passed under section 230(2) is without any remedy whatsoever. The appellant could have moved in accordance with the provisions of section 264 of the Act but as far as the provisions of section 246 are concerned, we find that in fact there is no clause which permits an appeal against an executive order or a direction which is made by an ITO under section 230(2). The mere fact that the ITO is entitled to determine the quantum of taxes which is demanded from a person u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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