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TMI Blog2016 (6) TMI 387X X X X Extracts X X X X X X X X Extracts X X X X ..... eason namely that the assessee do not stop with the mere receipt of money. He withdrew it and claimed to have paid to different third parties, but those payments were disallowed. Therefore, if his submission that he had paid money to third parties is true, the money received by him could be only his income. Therefore, the appellant cannot contend that the order of the Settlement Commission clinches the entire issue. - Decided against the appellant/father-assessee. Maintainability of the application under Section 154 - Held that:- The Assessing Officer rejected the application under Section 154 by a one line order. It was set aside by the Commissioner of Income Tax (Appeals). The Tribunal held that the issue raised by the assessee will fall under the category of a "debatable issue" and not "error apparent". We think that is a correct view taken by the Tribunal. While the treatment of the payment made by M/s. Siemens Limited at the hands of the appellant herein, after it was treated differently at the hands of M/s. Siemens Limited can, given some allowance, be treated as an error apparent, the moment it is shown to have been rejected in the order of Assessment, it would become ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh on the basis of an application filed by M/s. Siemens Ltd. before the Settlement Commission admitting the unsubstantiated commission payments as its own income and the Settlement Commission had accepted such disclosure by M/s. Siemens Ltd. and the income of the said company for the assessment years 1998-99 to 2003-04 had been recomputed on that basis? 2. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the issue involved was debatable the Assessing was right in rejecting the appellant's petition under Section 154 for the assessment years 1998-99 to 2003-04 even though the Assessing Officer had not passed any speaking order setting forth the reasons for the rejection 5. Heard Mr.K.Subramaniam, learned counsel appearing for the appellants/assessees and Mr.M.Swaminathan, learned Standing Counsel for the Department. 6. The assessees in this batch of cases, claimed to be involved in Commission Agency business. The father Mr.Durga Das Vyas, who is the appellant in T.C.A.Nos. 169 to 174 of 2012, filed return of income on 19.10.2001, admitting total income of ₹ 1,78,730/-. It was processed under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e filed Second Appeals before the Income Tax Appellate Tribunal. These appeals were allowed by the Tribunal, by a common order dated 14.11.2011, holding that when the issue raised in Application under Section 154 is a debatable issue, it would not fall under the category of error apparent. Therefore, aggrieved by the order of the Tribunal, the father-assessee is before us. 15. As we have pointed out earlier, this Court had framed two substantial questions of law for consideration in the appeals of the father namely T.C.A.Nos. 169 to 174 of 2012. The first substantial question of law revolves around the effect of the order of the Settlement Commission in favour of M/s. Siemens Limited. 16. This issue was answered by the Tribunal in paragraph 7 of its order. The Tribunal pointed out that the specific case of Siemens Limited before the Settlement Commission was that in some cases, the monies paid to individuals like the assessees herein, were received back. Therefore, the Tribunal held that there were two different categories of cases and hence the Settlement Commission's Order cannot be taken advantage by the father-assessee. 17. Assailing the order of the Tribunal, it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Direct Taxes, bearing No.71, dated 20.12.1971, the Board has indicated that once the same income is assessed as a protective measure in the hands of more than one assessee, the protective assessment needs to be cancelled after the relevant assessments have become final and conclusive. The Circular also indicates that the only method of doing this is by invoking Section 154, irrespective of the time prescription contained in Sub-Section (7) of Section 154. 23. We do not think that the above Circular can be made use of by persons whose transactions prima facie do not appear to be genuine. There may be a genuine transaction where one assessee is unable to substantiate a payment as an expenditure and hence suffers an assessment. His counter part who was the recipient of the money, if he has genuinely received the payment for certain services rendered or goods supplied, cannot be made to suffer once more. 24. But such a benefit cannot be extended to transactions which are made in the nature of accommodation entries, for collateral purposes. In the case of the father-assessee, cash withdrawals had been made immediately after receipt of cheque payments from M/s. Siemens Limited. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . At least in so far as the first substantial question of law is concerned, the appellant could rely upon the order of the Settlement Commission. But in the case of the payments allegedly received from two different entities there is not even an order of the Settlement Commission. Therefore, the second substantial question of law is also to be answered against the appellant/assessee. 31. In the course of arguments, Mr.K.Subramaniam, learned counsel for the appellant requested us to frame additional substantial question of law in T.C.A.Nos.167 and 168 of 2012. The additional substantial question of law that he wanted us to frame reads as follows:- Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in not observing that the notice under Section 143(2) for the Assessment Year 2002-03 was issued after the expiry of the period prescribed for the issue of notice under Section 143(2) under the proviso (ii) of the said sanction and therefore, in not holding that the re-assessment made was illegal and void? 32. Though this substantial question of law was not raised before the Commissioner of Income Tax (Appeals) or before the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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