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TMI Blog2005 (11) TMI 174X X X X Extracts X X X X X X X X Extracts X X X X ..... d identical grounds. These grounds relating to appeals filed against processing of returns under section 143(1)(a) in ITA Nos. 237,238 and 239 read as under: "1. That the learned CIT(A) has erred in not entertaining the appeal by holding that the assessee had failed to comply with the provisions of section 249(4)(a) and section 249(3) of the Income-tax Act, 1961. 2. That the authorities below erred in not appreciating that interest under sections 234A, 234B and 234C is not leviable on the appellant, (i.e., AOP) in respect of assessment years 1989-90 to 1991-92. 3. That the authorities below erred in not appreciating that the interest levied under sections 234A, 234B and 234C is to be levied only on an 'assessee', and the said AOP was to be treated as "assessee" under the provisions of Income-tax Act, 1961, only in pursuance of the judgment of the Hon'ble Supreme Court in the case of ITO v. Ch. Atchaiah [1996] 218 ITR 239 which judgment was delivered on 11th December, 1995, and since the ITO had already exercised his option in lines with the Circular F.No. 75/19/1941/62-II-J issued on 24th August, 1966 by the CBDT and had assessed the said income in the hands of the individu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9-90, 1990-91 and 1991-92. Each of these persons had 1/3rd share of profit in the said AOP. Accordingly, 1/3rd share of each member of AOP was declared in the respective returns filed by them and assessment in the individual cases had also been completed by the Assessing Officer under section 143(3). Such action of the Assessing Officer was in conformity with the judgment of Hon'ble Supreme Court in the case of State of Uttar Pradesh v. Raza Buland Sugar Co. Ltd. [1979] 118 ITR 50 where it was held that if an AOP or a firm was taxed in respect of its income, the same income cannot be charged again in the hands of the member individually and vice versa and the Board's Circular No. 75/19/1991/162-ITJ, dated 24th August, 1966. 3.1 However, subsequently the Hon'ble Supreme Court in the case of ITO v. Ch. Atchaiah [1996] 218 ITR 239 held that there was a difference between the provisions of Indian Income-tax Act, 1922, and the Income-tax Act, 1961. It was observed that under the old Act in respect of the total income of a firm or AOP income-tax was to be charged either on the firm or the AOP or on the partners of the firm or on the members of the AOP, individually. In this case option ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )(a) and assessments completed under section 143(3) disputing the interest charged under sections 234A, 234B and 234C. The learned CIT(A) dismissed the appeals filed against the processing of returns under section 143(1)(a) vide his order dated 15th March, 2000 in limine on the ground that assessee had not made payment of tax due on returned income and that appellate authority had no power to exempt the assessee from fulfilment of requirement of the provisions of section 249(4)(a) of the Income-tax Act. The relevant findings recorded by the CIT(A) in para 4 of the order are as under: "There is no discretion with the appellate authority to admit an C appeal where the assessee has not paid the tax due on the income returned by the assessee. It is not material as to how the AOP came to file its return and whether the members of AOP have paid some tax while filing their own return or not. I also do not agree with the arguments of learned counsel that CIT(A) has power to adjust the tax paid by other assessees against the tax payable by the appellant to comply with the requirement of section 249(4)(a) of Income-tax Act. The reference of the decision of Hon'ble Supreme Court wherein it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 and 1990-91 stood paid on 28th March, 2000. The amounts of Rs. 4,347 and Rs. 4,694 were adjusted against demand of Rs. 96,961 for the assessment year 1991-92. Still demand of Rs. 87,920 due on the basis of returned income for assessment year 1991-92 was due to be paid. The same was paid by the assessee only on 25th September, 2000. In fact, although the entire demand on returned income for the assessment years 1989-90 and 1990-91 stood paid on 28th March, 2000 and the CIT(A) decided the appeals filed against assessment completed under section 143(3) on 1st August, 2000, this fact was not brought to the notice of learned CIT(A). No appeals against these orders of CIT(A) were also filed before the Tribunal. 6. Thereafter, the assessee filed fresh appeals against the same orders of Assessing Officer on 4th October, 2000 where appeals were dismissed earlier in limine on the ground that assessee had not paid the tax on the returned income as required under clause (a) of sub-section (4) of section 249 of the Act. It was submitted before the CIT(A) that delay in filing the appeals was caused due to inaction on the part of Assessing Officer to act on the request for adjustment of deman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 249. In these circumstances, there is no power with first appellate authority to condone the lapse of not having paid the tax as per return. Further, only section 140A provides the manner of paying tax on returned income. So, the CIT(A) is duty bound to examine whether payment of tax is as per section 140A or not to examine whether section 249(4) has been complied with or not. 11. The provisions of section 140A provide as to how the assessee should make payment of tax as per return and as to how the amount paid by an assessee should be adjusted towards tax and interest. The Explanation to sub-section (1) of section 140A is reproduced below in this regard: 'Where the amount paid by the assessment this sub-section falls short of the aggregate of the tax and interest as aforesaid, the amount so paid shall first be adjusted towards the interest payable as aforesaid and the balance, if any, shall be adjusted towards the tax payable'. 12. In view of the Explanation, the assessee can be said to have paid only such amount towards the tax which exceeds the interest payable as per returned income. In the case of assessee, only sum of Rs. 90,901 was collected from the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he arguments of the learned counsel that the provisions of section 249(4)(a) have been complied with and that the appeal should be admitted. Accordingly, the appeal deserves as to be dismissed in limine for non-compliance of provisions of section 249(4)(a). 14. Alternatively, even if argument of the learned counsel is accepted that the assessee had made payments of taxes as per return in March, 2000, this would only explain the delay in filing of appeal till March, 2000. Nothing has been explained as to why appeal was not filed immediately thereafter and the delay in filing of appeal from April, 2000 to 3rd October, 2000 is not explained specially in view of the facts that the earlier appeal had already been dismissed vide order dated 15th March, 2000. In the delay in filing of appeal from April, 2000 to October, 2000 and, therefore, the delay cannot be condoned and the appeal is to be dismissed even on this ground." Assessee is aggrieved by the orders of CIT(A). Hence, these appeals before us. 7. The learned counsel for the assessee submitted that 1/3rd share of three members of AOP was shown in the returns of respective members and the same had been accepted by the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that the assessee was subjected to unnecessary harassment for no fault. He further submitted that the learned CIT(A) was not justified in dismissing the appeals of the assessee by taking a narrow view of non-compliance with provisions of section 249(4)(a), which in this case stood complied with. He also relied on the following judgments: (i) T. Govindappa Setty v. ITO [1998] 231 ITR 892 (Kar.) (ii) Vijayeswari Textiles Ltd. v. CIT [2002] 256 ITR 560 (Mad.) 8. Proceeding further, the learned counsel submitted that in the present case liability to tax in the case of AOP arose due to the Supreme Court judgment in the case of Ch. Atchaiah which was delivered only on 11th December, 1995. Therefore, the assessee could not be made to pay interest under sections 234A, 234B and 234C. He relied upon the following decisions: (i) ITAT, Chandigarh Bench, in the case of ITO v. Dr. Manjit Singh Sekon [2004] 91 TTJ (Chd.) 393. (ii) ITAT, Amritsar Bench, in the case of Janak Raj Chauhan v. Asstt. CIT [2002] 75 TTJ (Asr.) 260. (iii) ITAT, Delhi Bench, in the case of Haryana Warehousing Corpn. v. Dy. CIT [2000] 75 ITD 155 (TM). He, therefore, submitted that CIT(A) was not justified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that learned CIT(A) has dismissed the appeals in limine because of non-compliance with provisions of section 249(4) and the reason that there was a delay of more than 6 months in filing the appeals. He submitted that the learned CIT(A) has not decided the appeals on merits. The learned CIT(A) has merely stated that assessee has raised infructuous grounds. He submitted that judgment in the case of Vijayeswari Textiles Ltd. relied upon by the learned Authorised Representative is not applicable to this case because in that case Tribunal had recorded detailed findings both on delay and on merits. He strongly objected to the submission of the assessee that CIT(A) had given an assurance that he would condone the delay if the demand is paid. He submitted that such allegation is without any basis. The CIT(A) has passed the order in discharge of quasi-judicial function. It is neither the practice nor the law that quasi-judicial authority should file counter-affidavit in this regard. He strongly contended that Department should be awarded cost in this case for making baseless allegation. 10. We have heard both parties at some length and given careful thought to the rival contentions, exami ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t under sections 234A, 234B and 234C of the Act. Nowhere the section 249(4)(a) refers to provisions of section 140A and Explanation thereto. Therefore, reference made by the learned CIT(A) to section 140A and Explanation thereunder that payment made should first be adjusted against the interest due under sections 234A, 234B and 234C was not correct because section 249(4)(a) does not say so. If the intention of the Legislature was also to include interest chargeable under sections 234A, 234B and 234C for the purpose of section 249(4)(a), it could have been included in the section itself. The provisions of taxing statute require strict interpretation. When the provisions are clear and unambiguous, any reference to other provisions of the Act would be irrelevant and unnecessary. 10.2 The issue whether the assessee had complied with the requirement of section 249(4)(a) or not was also considered by the various High Courts and Benches of Tribunal. In the case of T. Govindappa Setty, the Karnataka High Court held that provisions of section 249(4)(a) have to be construed in the backdrop of the right to appeal provided to an assessee and, therefore, the Court will have to keep in mind th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 249(4)(a) as the default was not attributable to assessee. Appeal was admitted as competent. 10.4 Thus, the picture that emerges from the ratio of various judgments/decisions is that doors for filing the appeal by the assessee should not be shut merely on the ground that assessee had not paid the self-assessment tax on the tax on returned income. The requirement of section 249(4)(a) has to be seen in the backdrop of facts of the case. Now, in this case same income had been taxed in the hands of the members of AOP, who had also paid tax thereon. Now the same income has been included in the hands of AOP. The Assessing Officer adjusted the demand of AOP against the payment made by Shri Jagdish Raj Chauhan on 28th March, 2000 and as a result demand for assessment years 1989-90 and 1990-91 was reduced to nil. As regards assessment year 1991-92, the assessee paid the demand of Rs. 87,920 on the returned income on 25th September, 2000. The appeals were filed on 4th October, 2000. Therefore, the requirement of section 249(4)(a) was complied with at the time of filing the appeals. We have already observed that provisions of section 140A and Explanation thereunder providing for ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had been made before 31st March, 2000 and the entire demand was reduced to nil for these two assessment years. The appeals against processing of returns under section 143(1)(a) on account of non-payment of tax on the returned income were dismissed by the CIT(A) vide his order dated 15th March, 2000. Thus, it could not be said that assessee was unaware of this fact. This is also not the claim of the assessee that it was ignorant of the adjustments made by the Assessing Officer against the demand in March, 2000. No such plea has been taken either before the CIT(A) or before us. Therefore, it is not understood why appeals for the assessment years 1989-90 and 1990-91 were not filed immediately after March, 2000, the moment Assessing Officer had adjusted the tax against payments and reduced the demand to nil While there could be some justification for the delay in filing the appeals late up to March, 2000, i.e., when Assessing Officer adjusted the demand, there is absolutely no reason and justification for delaying the filing of appeals for a further period of more than six months up to 3rd October, 2000 so far as the assessment years 1989-90 and 1990-91 are concerned. Even the first a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the former consideration of prejudice to the other side will be a relevant factor and calls for a more cautious approach. In the latter case no such consideration may arise and such a case deserves a liberal approach. Now in the present case delay is not of a few days but of more than six months. Besides, there is absolutely no valid explanation/reason for the delay. In the case of CIT v. Ram Mohan Kabra [2002] 257 ITR 773, the Hon'ble Punjab Haryana High Court has held observed that where the Legislature spells out a period of limitation and provides for power to condone the delay as well, such delay can only be condoned only for sufficient and good reasons supported by cogent and proper evidence. It is a settled principle of law that provisions relating to the specified period of limitation must be applied with their rigour and effective consequences. In this case delay for filing the appeal late for only a few days was not condoned. In the case of Asstt. CIT v. Taggas Industries Development Ltd. [2002] 80 ITD 21 (Cal.), Tribunal, Calcutta Bench, Calcutta, did not condone the delay for filing the appeal late by 13 days because the delay was not due to sufficient cause. Thus, re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rly when no reasons whatsoever existed/explained before the CIT(A) and even before us. Therefore, this submission is also rejected. 11.5 Further, we also do not find any merit that CIT(A) had given an assurance for condoning the delay once the tax on returned income was paid. There is no such mention in the impugned orders. Even otherwise, such assurance has no legal force. Thus, the affidavit filed under rule 10 of ITAT Rules is also of no help to assessee. 11.6 We may also mention that learned CIT(A) had dismissed the appeals filed against the assessment orders passed under section 143(3) on the ground that assessee had not paid the tax on returned income vide his orders dated 1st August, 2000. On this date, tax on returned income already, stood paid for the assessment years 1989-90 and 1990-91. The assessee never brought this fact to the notice of CIT(A). Now, no further action was pending with Assessing Officer so far as these assessment years are concerned. If the assessee was aggrieved by the orders of CIT(A), the correct course for the assessee was to file the appeals before the Tribunal. But no appeals were filed. Therefore, this issue had attained finality so far as ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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