M/s Fiza Developers & Inter Trade Pvt. Ltd., Bangalore V. DCIT, Bangalore

ITA 1257/BANG/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 95179 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 25-08-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 16-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S V RAVISHANKAR
• Keywords: Principle of natural justice; Right to appeal

Judgement Text

ITA.1257/BANG/2013 PAGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH 'C', BANGALORE BEFORE SHRI. ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI. VIJAYPAL RAO, JUDICIAL MEMBER I.T.A NO.1257/BANG/2013 (ASSESSMENT YEAR : 2005-06) M/S. FIZA DEVELOPERS & INTER TRADE P. LTD, NO.25/1, RESIDENCY ROAD, BANGALORE .. APPELLANT PAN : AAACF5868N V. DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE -11(3), BANGALORE .. RESPONDENT ASSESSEE BY : SHRI. S. V. RAVISHANKAR, ADVOCATE REVENUE BY : SHRI. SUNIL KUMAR AGARWALA, JCIT HEARD ON : 25.08.2015 PRONOUNCED ON : 27.08.2015 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY ASSESSEE DIRECTED AGAINST AN ORDER DT.17.06.2013, ITS GRIEVANCE IS THAT THE CIT (A) DISMISSED ITS APPEAL FOR NON-PAYMENT OF TAX DUE ON RETURNED INCOME. 02. WHEN THE MATTER CAME UP BEFORE US, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE TOTAL TAX DUE AS PER THE RETURN FILED WAS RS.87,14,679/- OUT OF WHICH, RS.16,90,412/- STOOD CREDITED ON ACCOUNT OF TDS. AS PER THE LD. AR THOUGH IT WAS TRUE THAT ASSESSEE HAD NOT PAID FULL AMOUNT OF TAX AT THE TIME OF FILING THE RETURN OR BEFORE THE APPEAL WAS FILED, IT WAS LATER PAID IN FULL. LD. AR ITA.1257/BANG/2013 PAGE - 2 POINTED OUT THAT CIT (A) HAD AT PARA 4 OF ITS ORDER MENTIONED THAT TAXES WERE PAID BY THE ASSESSEE IN 2010. 03. PER CONTRA, LD. DR SUBMITTED THAT ASSESSEE HAVI NG NOT PAID THE ADMITTED TAX BEFORE FILING THE APPEAL BEFORE CIT (A), THE LA TTER WAS JUSTIFIED IN DISMISSING THE APPEAL. 04. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL CONTENTIONS. COPY OF THE RETURN FILED BY ASSESSEE SHOW THAT THE TOTAL AMOUNT OF TAX PAYABLE WAS RS.87,14,679/-. TDS AGAINST THE ABOVE AMOUNT WAS R S.16,90,412/-. ASSESSEE HAS ENCLOSED SELF-ASSESSMENT TAX CHALLAN FOR RS.45, 79,085/- PAID ON 28.01.2010, RS.25,00,000/- PAID ON 31.03.2006 AND RS.36,33,854/ - PAID ON 30.05.2006. THUS THE ADMITTED TAX STOOD FULLY PAID BY 2010. CI T (A) DISMISSED APPEAL OF THE ASSESSEE FOR THE SOLE REASON THAT ADMITTED TAXES WE RE NOT PAID RELYING ON SUB- SECTION (4)(A) OF SECTION 249 OF THE ACT. THAT, ON CE ADMITTED TAX IS PAID, APPEAL HAS TO BE DECIDED ON MERITS IN A SETTLED POSITION O F LAW BY VIRTUE OF JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CI T V. K. SATISH KUMAR SINGH (2012) 209 TAXMAN 0512 . PARA 4 & 5 OF THIS JUDGME NT IS REPRODUCED HEREUNDER: 4. SECTION 249 OF THE ACT DEALS WITH FORM OF APPEAL AND LIMITATION. SUB-SECTION (4) OF SECTION 249 OF THE ACT READS AS UNDER: 'NO APPEAL UNDER THIS CHAPTER SHALL BE ADMITTED UNL ESS AT THE TIME OF FILING OF THE APPEAL, (A) WHERE A RETURN HAS BEEN FILED BY THE ASSESSEE, THE ASSESSEE HAS PAID THE TAX DUE ON THE INCOME RETURNED BY HIM; OR ITA.1257/BANG/2013 PAGE - 3 (B) WHERE NO RETURN HAS BEEN FIFED BY THE ASSESSEE, THE ASSESSEE HAS PAID AN AMOUNT EQUAL TO THE AMOUNT OF ADVANCE TAX W HICH WAS PAYABLE BY HIM: PROVIDED THAT IN A CASE FALLING UNDER CLAUSE-(B) AN D ON AN APPLICATION MADE BY THE APPELLANT IN THIS BEHALF TH E COMMISSIONER (APPEALS) MAY, FOR ANY GOOD AND SUFFICIENT REASON T O BE RECORDED IN WRITING, EXEMPT HIM FROM THE OPERATION OF THE PROVI SIONS OF THAT, CLAUSE. THEREFORE, FROM THE AFORESAID PROVISION, IT IS CLEA R WHEN THE RETURN HAS BEEN FILED BY THE ASSESSEE, UNLESS THE ASSESSEE PAYS THE ADMITTED TAX DUE ON THE INCOME RETURNED BY HIM, NO APPEAL SH ALL BE ENTERTAINED AND ADMITTED. THEREFORE, IF ADMITTED TA X IS NOT PAID WHICH FALLS UNDER CLAUSE (A) OF SUB-SECTION (4) OF SECTION 249 OF THE ACT, THE COMMISSIONER (APPEALS) IS NOT VESTED WITH ANY POWER TO WAIVE PAYMENT OF SUCH ADMITTED TAX AND ENTERTAIN TH E APPEAL. THE ORDER OF DISMISSING THE APPEAL IN SUCH CIRCUMSTANCE S IS AUTOMATIC. THEREFORE, THE APPEAL DISMISSED UNDER CLAUSE (A) OF SUB-SECTION (4) OF SECTION 249 OF THE ACT FOR NON-PAYMENT OF ADMITT ED TAX DUE ON THE INCOME RETURNED BY THE ASSESSEE CANNOT BE FOUND FAULT WITH. HOWEVER, IF AFTER SUCH DISMISSAL, IF THE ASSESSEE P AYS THE ADMITTED TAX AND REQUESTS THE APPELLATE AUTHORITY TO RECALL THE ORDER DISMISSING THE APPEAL IN LIMINE AND TO CONSIDER THE APPEAL ON MERITS UNDER THE AFORESAID PROVISION OR UNDER ANY O THER PROVISION OF THE ACT, THERE IS NO PROHIBITION OR LEGAL IMPEDI MENT FOR THE APPELLATE AUTHORITY TO RECALL ITS EARLIER ORDER AND ENTERTAIN THE APPEAL AND DECIDE THE SAME ON MERITS. 5. THE APEX COURT IN THE CASE OF VIJAY PRAKASH D. M EHTA V. COLLECTOR OF CUSTOMS [1989] 175 ITR 540 (SC) DEALING WITH THE SIMILAR PROVISIONS UNDER THE CUSTOMS ACT HAS HELD T HAT THE RIGHT OF APPEAL IS NEITHER AN ABSOLUTE RIGHT NOR AN INGREDIE NT OF NATURAL JUSTICE, THE PRINCIPLES OF WHICH MUST BE FOLLOWED I N ALL JUDICIAL AND QUASI-JUDICIAL ADJUDICATIONS. THE RIGHT OF APPEAL I S A STATUTORY RIGHT AND IT CAN BE CIRCUMSCRIBED BY THE CONDITIONS IN TH E GRANT. IT IS NOT THE LAW THAT ADJUDICATION BY ITSELF, FOLLOWING THE RULES OF NATURAL JUSTICE, WOULD BE VIOLATIVE OF ANY RIGHT, CONSTITUT IONAL OR STATUTORY WITHOUT ANY RIGHT OF APPEAL, AS SUCH. IF THE STATUT E GIVES A RIGHT TO APPEAL UPON CERTAIN CONDITIONS, IT IT UPON FULFILME NT OF THOSE CONDITIONS THAT THE RIGHT BECOMES VESTED IN, AND EX ERCISABLE BY, THE APPELLANT. IF DISCRETION IS VESTED, THEN THERE IS A N OBLIGATION TO ACT JUDICIALLY AND PROPERLY. THE PURPOSE OF SUCH RESTRI CTION IS TO ACT IN TERROREM TO MAKE THE PEOPLE COMPLY WITH THE PROVISI ONS OF LAW. THEREFORE, THE OBJECT OF STIPULATING CONDITIONS SUC H AS DEMAND OF ADMITTED TAX IS A CONDITION PRECEDENT FOR ENTERTAIN ING THE APPEALS ITA.1257/BANG/2013 PAGE - 4 AND ADMITTING THE APPEALS IS TO SEE THAT THE APPELL ANT OBEYS THE LAW, THOUGH THE RIGHT OF APPEAL IS CONFERRED UNDER A STA TUTE, THE SAID RIGHT IS SUBJECTED TO THE RESTRICTIONS IMPOSED UNDE R THE VERY SAME STATUTE. THERE CANNOT BE ANY ABSOLUTE RIGHT DE HORS THE PROVISIONS OF THE STATUTE. THEREFORE, IN THE INSTANT CASE, THE ST ATUTE HAS CONFERRED A RIGHT OF APPEAL. IT ALSO IN UNEQUIVOCAL TERMS EXP RESSLY HAS STATED THAT IN CASES WHERE THE ASSESSEE FILES A RETURN AND ADMITS THE LIABILITY TO PAY TAX ON THE INCOME RETURNED, UNLESS HE PAYS THE SAID ADMITTED TAX DUE ON THE INCOME RETURNED, HE MAY NOT EXERCISE THE STATUTORY RIGHT OF APPEAL. AS IS CLEAR FROM CLAUSE (B) OF SUB-SECTION (4) OF SECTION 249 OF THE ACT IN ALL CASES FALLING UNDER SUB-SECTION (4) OF SECTION 249, NO DISCRETION IS VESTED WITH TH E APPELLATE AUTHORITY. THEREFORE, IN CASES FALLING UNDER CLAUSE (A) OF SUB- SECTION (4) OF SECTION 249 OF THE ACT, IF THE SAID CONDITION IS NOT FULFILLED BY THE ASSESSEE, THE APPEAL SHALL NOT BE ADMITTED AND THE ONLY ORDER THAT CAN BE PASSES IS DISMISSAL OF THE A PPEAL IN LIMINE. KEEPING IN MIND, THE OBJECT WITH WHICH THESE PROVIS IONS ARE INTRODUCED, ONCE THE ASSESSEE REALISES HIS OBLIGATI ONS UNDER THE STATUTE, THE PURPOSE WITH WHICH THESE PROVISIONS IN TERROREM ARE INTRODUCED UNDER THE ACT, OBEYS THE STATUTORY OBLIG ATIONS, PAYS THE TAX, THEN HE MAY NOT BE DENIED THE RIGHT OF APPEAL WHICH THE STATUTE HAS PROVIDED TO HIM. IN THE ABSENCE OF ANY EXPRESS WORDS CIRCUMSCRIBING THE POWERS OF THE TRIBUNAL, THE TRIB UNAL HAS THE AMPLE POWER TO RECALL ITS EARLIER ORDER DISMISSING THE APPEAL IN LIMINE AND TO HEAR THE APPEAL ON MERITS. IF THE ADM ITTED TAX HAD BEEN PAID, THE APPELLATE AUTHORITY OUGHT TO HAVE AD MITTED THE APPEAL AND HEAR THE APPEAL ON MERITS. OF COURSE, WH ILE RECALLING THE ORDER, IT IS OPEN TO THE AUTHORITY TO FIND OUT WHETHER THE SAID APPLICATION IS MADE BONA FIDE, IS THERE ANY UNREASO NABLE DELAY IN APPROACHING THE TRIBUNAL AND OTHER MATTERS. BUT ONC E THE CONDUCT OF THE ASSESSEE IS NOT SUCH AS TO DISENTITLE HIM TO EXERCISE HIS RIGHT OF APPEAL BY OBEYING THE LAW, THAT IS BY DEPOSITING THE ADMITTED TAX LIABILITY, THE APPELLATE AUTHORITY SHOULD BE LIBERA L IN ENTERTAINING THESE APPLICATIONS AND HEAR THE APPEAL ON MERITS AN D PASS APPROPRIATE ORDERS, IN ACCORDANCE WITH LAW. IN THE LIGHT OF WHAT WE HAVE STATED, THE ORDER PASSED BY THE TRIBUNAL CANNO T HE FOUND FAULT WITH. ACCORDINGLY, THE APPEAL IS DISMISSED. FOLLOWING THE ABOVE JUDGMENT, WE SET ASIDE THE ORDE R OF CIT (A) AND REMIT THE ISSUE BACK FOR CONSIDERATION IN ACCORDANCE WITH LAW . ITA.1257/BANG/2013 PAGE - 5 05. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 27TH DAY OF A UGUST, 2015. SD/- SD/- (VIJAYPAL RAO) (ABRAHAM P GEORGE) JUDICIAL MEMBER ACCOUNTA NT MEMBER MCN* COPY TO: 1. THE ASSESSEE 2. THE ASSESSING OFFICER 3. THE COMMISSIONER OF INCOME-TAX 4. COMMISSIONER OF INCOME-TAX(A) 5. DR 6. GF, ITAT, BANGALORE BY ORDER ASSISTANT REGISTRAR