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TMI Blog2017 (10) TMI 1328X X X X Extracts X X X X X X X X Extracts X X X X ..... see, without specifying how the evidence discussed in the assessment order and in the order of the CIT (A) could not be relied upon.?" 2. D.B. Income Tax Appeal No. 78/ 2014 "Whether on the facts and in circumstances of the case, the ITAT was justified in law in deleting the addition of Rs. 41,20,000/- made on account of profit earned on sale of lands at Hanumanpura, Jaipur holding that assessee was just a broker ignoring the admission of the assessee u/S.132(4) quoted in the assessment order that the land transactions were made by him in his individual capacity and ignoring vital evidence in the form of agreement of land transactions dated 07.04.2007 & 23.11.2007 and ignoring other evidence discussed at length in the assessment order.?" 3. D.B. Income Tax Appeal No. 79/ 2014 "1.Whether on the facts and in circumstances of the case, the ITAT was justified in law in deleting the addition of Rs. 2,61,57,380/- made u/S.69B on account of undisclosed investment in lands at Hanumanpura, Jaipur holding that assessee was just a broker ignoring the admission of the assessee that the land transactions were made by him in his individual capacity and ignoring vital evidence in the form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es start on the death of the deceased respondent. Article 171, First Schedule to the Limitation Act provides that. It does not provide the limitation to start from the date of the appellant's knowledge thereof. The stand taken by the appellant was absolutely unjustified and betrayed complete lack of knowledge of the simple provision of the Limitation Act. In these circumstances, the High Court cannot be said to have taken an erroneous view about the appellant's not establishing sufficient ground for not making an application to bring on record the representatives of the deceased respondent within time or for not making an application to set aside the abatement within time. We, therefore, see no force in this appeal and dismiss it with costs." 5. However, counsel for the appellant has relied on the decision in the case of Commissioner of Income-Tax And Another V/s Smt. V. Rukmini [2011] 331 ITR 102 (Karn), wherein it has been held as under:- "10. Section 159 of the Act deals with the liability of the legal representatives to pay of tax under the Act which reads as under: 159 (1) Where a person dies, his legal representative shall he liable to pay any sum which the decea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave been taken against the legal representative and may be continued against the legal representative from the stage at which it stood on the date of death of the deceased. The language employed in this Sub-section manifests the intention of the legislature which expressly provides on the death of a person any proceeding by way of assessment, reassessment, or recomputation initiated under the Act is deemed to have been initiated against the legal representative himself and therefore, it can be continued from the stage at which it stood on the death of the deceased. Therefore, the concept of abatement is completely excluded in these proceedings. Sub-section (2)(b) makes it clear even if proceedings had not been initiated against the deceased during his life time, such proceedings may also be initiated against the legal representative after his death. Whether the proceedings are initiated under Clause (a) or Clause (b), the provisions of the Act shall apply. Sub-section (3) expressly provides that the legal representative of the deceased shall, for the purpose of this Act, be deemed to be an Assessee. Therefore, the aforesaid provision makes it clear that, once the liability is incur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utes underline the truth that the appellate authority is no different, functionally and substantially, from the assessing authority itself. This position has been well brought out in more than one decision of the Supreme Court." 13. Therefore, in a tax appeal the appellate authority is no different functionally and substantially from the assessing authority itself. An appeal is a continuation of the process of assessment. The appellate authority can itself enter the arena of assessment either by pursuing further investigation or causing further investigation to be done. It can do so on its own initiative. It can enhance assessment in the Assessee appeal. The intention of the legislature in enacting Section 159 of the Act is very clear and therefore, either before the Assessment Authority or in the appeal before the Commissioner of Appeals, there is no question of abatement of the proceedings initiated against the person under the Act on account of his death. After his death the proceedings would be continued against his legal representatives. 14. The position is different in the case of second appeal before the Tribunal. The procedural law before the Tribunal is governed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als to the Supreme Court. Section 256 lays down how a statement of the case is to he drawn up and referred to the High Court. Section 257 provides for a similar statement of case to the Supreme Court in certain cases. Section 258 is in respect of the power of the High Court or the Supreme Court. Section 259 provides how the case is to he heard by the High Court and Section 260 lays down how the decision of the High Court or the Supreme Court is to be given. Section 261 provides for appeal to the Supreme Court and Section 262 provides for the manner in which the appeal is to be heard by that court. It will appear from the aforesaid provisions relating to the High Court that there is no procedure similar to that as laid down under Order XXII of the Code contained in this Act. For the matter of that so far as High Courts are concerned, these provisions do not make the provisions of Order XXIIof the Code applicable to cases of reference. I will do well, however, to point out that in respect of the appeal to the Supreme Court. Section 262 of the Act clearly states that the provisions of the Code relating to appeals to the Supreme Court shall, so far as may be, apply in the case of appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht of a Plaintiff or an Appellant to prosecute the suit or appeal any further. In the absence of any such penal provision in the Income Tax Act, it would be unfair to read such a provision contained in the Code as incorporated in the Income Tax Act and thereby saddle a litigant with an obligation which a litigant, prima facie, does not suffer from. If that were to be done, it would affect a special law like the Income Tax Act and the special jurisdiction conferred thereby on the High Court. In my view therefore. Order XXII of the Code has no application even for this reason." 17. Therefore, it was well settled that Order 22 of Code of Civil Procedure has no application to a reference under Section 256 of the Act to the High Court. It is after deleting the aforesaid provision. Section 260A of the Act is introduced as aforesaid. In the reasons while introducing this provision this is what the parliament has to say "as the procedure for filing appeals before the High Court is prescribed in the Code of Civil Procedure. it is proposed to provide the necessary reference that the relevant provisions of the Code of Civil Procedure shall apply mutatis mutandis to Section 260A of the Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herwise provided in this Act, the provisions of the Code of Civil Procedure. 1908 (5 of 1098). relating to appeals to the High Court shall, as far as may be apply in the case of appeals under this section.) 19. Section 260A(1) confers a right on the parties to prefer an appeal to the court from every order passed in an appeal before the Tribunal. However, such an appeal could be admitted by the High Court only if it is satisfied that it involves a substantial question of law. The High Court shall formulate the question at the time of admitting the appeal. Sub-section (4) makes it very clear that the appeal shall be heard only on the question so formulated and the Respondent is conferred a right to argue that the case does not involve a substantial question of law. The proviso also confers power on the High Court to formulate any other substantial question of law which is not formulated at the time of admission. Sub-sections (5) and (6) confers wide powers on the High Court in deciding the appeal. It also provides for a time limit within which an appeal has to be filed and what memorandum of appeal should contain. Subsection (2A) which was inserted by Finance Act 2009 which prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds as under. 11. Application of order to appeals - In the application of this order to appeals, so far as may he the word "Plaintiff" shall he held to include an Appellant, the word "Defendant" a Respondent, and the word "suit" in the appeal As the wordings of the said provision makes it clear that Order 22is made applicable to the appeals also, Order 22 exclusively deals with death, marriage and insolvency of the parties. Order 22 Rule 1 expressly declares that no abatement by party's death if right to sue survives. It also deals with the procedure when the Plaintiff or the Defendant dies, to bring the legal representatives on record, what are the questions to be gone into by the Court at the time of considering the said application if the application is objected to and the effect of abatement or dismissal. As all those provisions refer to only suits, Order II makes it clear the said Order also applies to the appeals. 21. When Sub-section (7) of Section 260A restricts the application of the Code of Civil Procedure, only to the matters covered under the Code relating to appeals, when there is no specific reference to Order 22, merely because Order 22 Rule 11 of Code of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. An application is to be filed to bring the legal representatives on record as the principle of natural justice requires that they should be heard before any order is passed to the extent of the liability to pay tax in respect of the estate which they have inherited. In that view of the matter, the objection taken by the Respondent that Order 22 of Code of Civil Procedure applies to an appeal under 260A of the Act and if there is a delay in filing the said application, abatement takes place and therefore, the applications filed for setting aside abatement, for condoning the delay are required to be rejected as no sufficient cause are shown, is without any substance. 22. The learned Counsel for the Respondent brought to our notice the judgment of the Division Bench of this Court in ITA No. 9/2000 in the case of the Income Tax Officer v. T. Parthasarathy, where it was observed in paras 3 and 4 of the judgment as follows: 3. At the time of argument, it is brought to our notice that the Assessee has died on 11.3.2006. No legal representative have been brought on record as on today. 4. In the circumstance, the appeal stands abated as on today. Ordered accordingly. No costs. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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