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TMI Blog2017 (2) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal has dismissed the appeal filed by the assessee and confirmed the order of the CIT(A). 2. This Court while admitting the appeal No.128/2006 on 05.07.2007 and appeal No.34/2008 on 20.08.2008 has framed the following substantial questions of law: 1. Whether Income Tax Appellate Tribunal overlooked and ignored the provision contained in Section 254(1) of the Income Tax Act in non granting relief to the assessee and affirming the order of the Commissioner of Income Tax (Appeals)? 2. Whether the Income Tax Appellate Tribunal overlooked the legal and Constitutional provision that no amount of tax can be recovered without any authority of law and, therefore, the Union could not have been permitted to retain the have been permitted to retain the excess amount of tax paid by the assessee? 3. Counsel for the appellant has relied upon the decisions of different High Courts. 3.1. In the case of S.R. Koshti Vs. Commissioner of Income Tax- (2005) 276 ITR 165, it has been held by Gujarat High Court as under: A word of caution. The authorities under the Act are under an obligation to act in accordance with law. Tax can be collected only as provided under th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght of the circular issued by the CBDT and held that no refund can be granted to the assessee while completing the assessment under Section 143(3) of the Act, we are not prepared to accept the same. On a careful reading of the said decision, we find that the provisions under Section 143(3) of the Act did not fell for consideration before the Division Bench of Bombay High Court in the said decision. Only a casual reference was made to the amendment brought to Section 143 of the IT Act from the assessment year 1989-90 onwards. The Division Bench in the said decision has no occasion to deal with a question as to whether the Assessing Authority had the power to order refund while making a regular assessment under Section 143(3) of the Act. We are, therefore, of the view that this decision cannot render any assistance to the Revenue to say that the decision of the Bombay High Court is in line with the thinking of the Revenue. Merely because there are certain departmental instructions as provided in circular Ref.Na549 dated 31- 10-1989 issued by the CBDT; we arc of the view, such instructions cannot overweigh the statutory provisions of the Income Tax Act and as such we are not persuaded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t as his, the Income Tax Officer came to the conclusion that it was the Hindu undivided family that was liable to be assessed on that income and not the assessee. It was a conclusion, whether it was right or wrong, that he had jurisdiction to reach; and, once be reached that conclusion, he could not tax the assessee. In Esthuri Aswathiah v. Income Tax Officer, Mysore State, their Lordships of the Supreme Court pointed out that the order 'no proceedings' terminated the assessment proceedings, and that it should be construed as meaning that the assessee had no assessable income. The assessment proceedings that commenced with the returns filed by the assessee were lawfully terminated when they were closed with the entry 'N.A.' Thereafter, the finality of the termination of those assessment proceedings could be vacated only by recourse to Section 34, as this was not a case for the application of Section 35. 3.4. In the case of Seshammal (R.) Vs. Income-tax Officer- (1999)237 ITR 0185, Madras High Court has held as under: The fact that the petitioner had paid the monies to the Government under the mistaken notion that the association of persons would be liable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order without keeping in mind the circular which he has referred to in the assessment order within a period one month from the date of receipt of the writ. 3.6. In the case of Commissioner of Income Tax Vs. Bharat General Reinsurance Co. Ltd. (1971) 081 ITR 0303, Delhi High Court has held as under: It is true that the assessed itself had included that dividend income in its return for the year in question but there is no estoppel in the Income-tax Act and the assessed having itself challenged the validity of taxing the dividend during the year of assessment in question, it must be taken that it had resoled from the position which it had wrongly taken while filing the return. Quite apart from it, it is incumbent on the income-tax department to find out whether a particular income was assessable in the particular year or not. Merely because the assessed wrongly included the income in its return for a particular year, it cannot confer jurisdiction on the department to tax that income in that year even though legally such income did not pertain to that year. We are, therefore, of the view that the income from dividend was not assessable during the assessment year 1958-59 bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring appeal against the order of a subordinate authority has all the powers which the original authority may have in deciding the question before it subject to the restrictions or limitations if any prescribed by the statutory provi- sions. In the absence of any statutory provision the Appel- late Authority is vested with all the plenary powers which the subordinate authority may have in the matter. There appears to be no good reason and none was placed before us to justify curtailment of the power of the Appellate Assist- ant Commissioner in entertaining an additional ground raised by the assessee in seeking modification of the order of assessment passed by the Income Tax Officer. 3.8. In the case of National Thermal Power Co. Ltd. Vs. Commissioner of Income-tax- (1998) 229 ITR 0383, the Supreme Court has held as under: 3. The assessee contended that on account of two orders of Special Benches of the Tribunal in the cases of Arasan Aluminium Industries (P) Ltd. and Nagarjuna Steels Ltd., the assessee learnt that the interest earned in this manner before the setting up of business is not taxable as income and it goes to reduce the capital cost of the plant. On learning a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e restrictions or limitations, if any, prescribed by the statutory provisions. In the absence of any statutory provision, the appellate authority is vested with all the plenary powers which the subordinate authority may have in the matter. There is no good reason to justify curtailment of the power of the Appellate Assistant Commissioner in entertaining an additional ground raised by the assessee in seeking modification of the order of assessment passed by the Income-tax Officer. This Court further observed that there may be several factors justifying the raising of a new plea in an appeal and each case has to be considered on its own facts. The Appellate Assistant Commissioner must be satisfied that the ground raised was bona fide and that the same could not have been raised earlier for good reasons. The Appellate Assistant Commissioner should exercise his discretion in permitting or not permitting the assessee to raise an additional ground in accordance with law and reason. The same observations would apply to appeals before the Tribunal also. 3.9. In the case of Ahmedabad Electricity Co. Ltd. Vs. Commissioner of Income-tax- (1993) 199 ITR 351 (Bom), the Bombay High Court h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he powers of an Appellate Assistant Commissioner. But, even before the Explanation was added to section 251, that section and the corresponding previous section had been interpreted by our High Court and other High Courts in the same manner. 3.10. In the case of Commissioner of Income-Tax (Central), Madras Vs. Indian Express (Madurai) Pvt. Ltd.-(1983) 140 ITR 705 (Mad), the Madras High Court has held as under: The primary purpose of the stature is to levy and collect the income-tax. This is based on the cardinal principle, which has been incorporated as a veritable constitutional provision, that no tax can be levied or collected save under authority of law. The task of an appellate authority under the taxing statute, especially a nondepartmental authority like the Tribunal, is to address its mind to the factual and legal basis of an assessment for the purpose of properly adjusting the taxpayer's liability to make it accord with the legal provisions governing his assessment. Since the be-all and end-all of the statutory provisions, especially those relating to the administration and management of income-tax, is to ascertain the tax-payers' liability correctly, to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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