9911796707
TMI Blog1995 (1) TMI 130X X X X Extracts X X X X X X X X Extracts X X X X ..... rejected by the ITO by his order dated 26-7-1990 by stating that the profit and loss account and the balance-sheet as at 31-3-1988 which were filed along with the assessee's application under section 154 had not been filed along with the return for assessment year 1988-89 and on verification of the miscellaneous record for assessment year 1988-89, it was seen that the assessee had chosen to estimate the profit at the rate of 10% on the net receipts of Rs. 1,99,876. He further stated that in the profit and loss account filed along with the application, the work-in-progress as on 1-4-1987 was shown at Rs. 27,000, but the assessee had chosen to estimate the income for assessment year 1987-88 at 9.5%. He accordingly concluded that had the assessee maintained the books of account, he should have filed profit and loss account, balance-sheet, etc., along with the return for assessment year 1988-89. He, therefore, held that maintenance of accounts for assessment year 1988-89 was not supported by any evidence in view of the statements which were filed along with the return for assessment year 1988-89 on 3-10-1988. The request made by the assessee for rectification of mistake under section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with that ground specifically, but stating that he had disposed of the appeal by keeping in view the facts mentioned in paragraph-2 of his order dated 26-4-1991, rejected the application under section 154 by observing in the said paragraphs as under :- " I have considered the contention of the appellant and heard the A.R. for the appellant who appeared in response to notice under section 154. There is no doubt that the above mentioned ground was clearly noted in the appeal order. It is true that the same ground was not taken up specifically and separately while considering the appeal. The provisions of section 143(1)(a) in proviso (iii) takes care of the items that are prima facie inadmissible and casts the obligation on the Assessing Officer to disallow the same. These items are relating to loss carry-forward, deduction, allowance or relief claimed in the return. In the light of these legal provisions, it is to be seen whether the disallowance of opening work-in-progress was coming under one of these items for prima facie adjustment. In my opinion, this comes under the item " deduction ". Holding this view, I am guided by the facts of the appellant's case. Firstly, the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee filed a miscellaneous petition before the Deputy Commissioner(Appeals) which was also rejected. In view of the factual development, the assessee was asked to explain and clarify as to how the revision petition was maintainable within the scope of sub-section (4) of section 264, particularly when the order sought to be revised was one passed by the Assessing Officer and an appeal was preferred against the same. In response to the same the assessee moved a separate petition seeking revision of the order of the Deputy Commissioner(Appeals) dated 1-2-1991 read with his order under section 154 dated 26-4-1991. A letter was also addressed to the CIT declaring that the assessee had waived his right of appeal before the Tribunal in the following words :- " In this connection I request the learned Authority to kindly consider this petition under section 264 and do justice in my case. As the first appeal was already finalised and a petition under section 264 cannot be entertained by the learned Commissioner of Income-tax, Visakhapatnam, unless I give a declaration that I have waived my right of appeal before the Appellate Tribunal, I confirm and declare through this petition t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly issue that can be considered is whether there was a mistake in the original order of the Deputy Commissioner(Appeals). 7. The assessee's case, however, is that the declaration given by the assessee under section 264(4) of the Income-tax Act was not in accordance with law inasmuch as it was made when the appeal had already been filed by the assessee and that the declaration was not made to the Tribunal before which the appeal had been filed but to the CIT in the proceedings under section 264. The order of the CIT under section 264 is, therefore, made in violation of the provisions of sub-section (4) of section 264 and hence a nullity and therefore the impugned order of the Deputy Commissioner(Appeals) could not be said to have merged in the order of the CIT. For this proposition, the learned counsel of the assessee sought to draw support from the decision of the Bombay High Court in the case of Arvind N. Mafatlal v. Union of India [1973] 90 ITR 429, and of the Supreme Court in the case of Raja Jagdambika Pratap Narain Singh v. CBDT [1975] 100 ITR 698 at 703. As regards the second argument of the Revenue, the contention of the learned counsel of the assessee is that the appeal t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order lies to Deputy Commissioner(Appeals) or to the Commissioner(Appeals) or to the Appellate Tribunal but has not been made and the time within which such appeal may be made has not expired, or, in the case of an appeal to the Commissioner(Appeals) or to the Appellate Tribunal, the assessee has not waived his right of appeal ; or (b) Where the order is pending on an appeal before the Deputy Commissioner(Appeals) ; or (c) Where the order has been made the subject of an appeal to the Commissioner(Appeals) or to the Appellate Tribunal. " The assessee submitted himself to the jurisdiction of the CIT to the exclusion of the Appellate Tribunal. Having failed to get the desired relief from the CIT under section 264, the assessee, in our opinion, would not be entitled, rather should not be allowed, to go back and invoke the appellate jurisdiction stating that the declaration given by him to the CIT was not in accordance with law. An assessee cannot be allowed to take advantage of his unsuccessful or misfired choice of opting a particular forum to seek redress. It was the assessee who had opted to give the declaration waiving his right of appeal to the Tribunal. The CIT could have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal, i.e., the order of the Deputy Commissioner(Appeals) which is now appealed against before us, is purported to have been made but is not under section 154. At the instance of the assessee, the Deputy Commissioner(Appeals) proceeded to deal with the ground that the ITO had no jurisdiction to make adjustment under section 143(1)(a) by disallowing the work-in-progress debited to the profit and loss account. The said issue, in our opinion, was not really a matter for rectification under section 154. In the original order dated 1-2-1991 the Deputy Commissioner(Appeals) had specifically stated : " The only issue is about Assessing Officer's refusal to delete Rs. 40,000 towards work-in-progress which was adjusted under section 143(1)(a). The appellant has objected to the order of refusal of rectification. It is contended that such refusal was not as per law. The value of work-in-progress cannot be disallowed by making adjustment under section 143(1)(a). " These were the contention which were dealt with by the Deputy Commissioner(Appeals) in his order dated 1-2-1991. From the extract of his order given in paragraph-3 above, it is evident that what he has held was that the Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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