Suvistas Software Pvt. Ltd., Hyderabad V. ITO,Ward 3(2), Hyderabad

ITA 1299/HYD/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 87443 (ITAT-HYDERABAD)
• Duration Of Justice: 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 26-03-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 04-07-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAMAKRISHNA BANDI
• Assessee Lawyers: P RAVI SESHAGIRI RAO
• Keywords: Right to appeal
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA.NO.1299/HYD/2014 ASSESSMENT YEAR 2003-2004 MR. R. SUBBA RAO FORMER MANAGING DIRECTOR, M/S. SUVASTAS SOFTWARE P. LTD., HYDERABAD PAN AAECS9112N VS. THE INCOME TAX OFFICER, WARD 3(4) HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : MR. P. RAVISESHAGIRI RAO FOR REVENUE : MR. RAMAKRISHNA BANDI DATE OF HEARING : 26.03.2015 DATE OF PRONOUNCEMENT : 27.03.2015 ORDER PER P.M. JAGTAP, A.M. THIS APPEAL, WHICH IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-IV, HYDERABAD DATED 19.06.2014 WHERE BY HE REJECTED THE APPLICATION FILED IN THE CASE OF M/S. SUVISTAS SOFTWARE PVT. LTD. (COMPANY) SEEKING RECTIFICATION OF THE APPELLATE ORDER DATED 30.11.2007, IS FILED BEFORE T HIS TRIBUNAL BY MR. R. SUBBA RAO, ITS MANAGING DIRECTOR (APPELLA NT) AND A PRELIMINARY ISSUE THAT ARISES OUT OF THE SAME FOR O UR CONSIDERATION IS WHETHER THE SAME IS MAINTAINABLE A S PER THE PROVISIONS OF SECTION 253 OF THE I.T. ACT, 1961. 2. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. I T IS OBSERVED THAT AGAINST THE APPELLATE ORDER PASSED BY THE LD. CIT(A)-IV, 2 ITA.NO.1299/HYD/2014 M/S. SUVISTAS SOFTWARE PVT. LTD., HYDERABAD. HYDERABAD DATED 30.11.2007 IN THE CASE OF M/S. SUVI STAS SOFTWARE PVT. LTD. (COMPANY), APPEAL WAS PREFERRED BY MR. R. SUBBA RAO, ITS MANAGING DIRECTOR (APPELLANT) AND TH E SIMILAR PRELIMINARY ISSUE INVOLVED THEREIN RELATING TO THE MAINTAINABILITY OF THE APPEAL HAS ALREADY BEEN DECI DED BY THE TRIBUNAL VIDE ITS ORDER DATED 13.02.2015 PASSED IN ITA.NO.1475/HYD/2014 HOLDING THAT THE APPELLANT WAS NOT ENTITLED TO FILE APPEAL AGAINST THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) DATED 30.11.2007 CONFIRMING THE PENA LTY IMPOSED BY THE A.O. UNDER SECTION 271(1)(C) ON THE COMPANY. THE REASONS GIVEN BY THE TRIBUNAL FOR COMING TO THE SAID CONCLUSION AS CONTAINED IN PARAGRAPH NOS. 10 TO 21 ARE EXTRACTED BELOW : 10. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL ON REC ORD. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME- TAX(APPEALS) IV, HYDERABAD DATED 30.11.2007 PASSED IN THE CASE OF M/S. SUVISTAS SOFTWARE PVT. LTD., A PRI VATE LIMITED COMPANY, CONFIRMING THE PENALTY OF RS.2,37, 039 IMPOSED BY THE ASSESSING OFFICER UNDER S.271(1)(C) IS IMPUGNED IN THE PRESENT APPEAL FILED BY SHRI R.SUBB A RAO, FORMER MANAGING DIRECTOR OF THE SAID COMPANY, IN HIS INDIVIDUAL CAPACITY, AND THE ISSUE THAT ARISES FOR OUR CONSIDERATION IS WHETHER THE SAID APPEAL IS MAINTAI NABLE OR NOT. AS PER THE PROVISIONS OF S.253, ANY ASSESSE E AGGRIEVED INTER ALIA BY THE ORDER OF THE LEARNED CI T(A) PASSED UNDER S.250 CAN APPEAL TO THE TRIBUNAL AGAIN ST SUCH ORDER, AND THE QUESTION IS WHETHER THE APPELLA NT IN THE PRESENT CASE CAN BE SAID TO BE AN ASSESSEE AGGR IEVED BY THE ORDER OF THE LEARNED CIT(A) PASSED IN THE CA SE OF PRIVATE LIMITED COMPANY, M/S. SUVISTAS SOFTWARE PVT . LTD. THE TERM ASSESSEE USED IN THE INCOME TAX ACT, 196 1 IS DEFINED IN SUB-SECTION (7) OF S.2 AS UNDER- SECTION 2(7) ASSESSEE MEANS A PERSON BY WHOM ANY TAX OR ANY OTHER SUM OF MONEY IS PAYABLE UNDER THIS ACT, A ND INCLUDES 3 ITA.NO.1299/HYD/2014 M/S. SUVISTAS SOFTWARE PVT. LTD., HYDERABAD. (A) EVERY PERSON IN RESPECT OF WHOM ANY PROCEEDING UNDE R THIS ACT HAS BEEN TAKEN FOR THE ASSESSMENT OF HIS I NCOME OR ASSESSMENT OF FRINGE BENEFITS OR OF THE INCOME O F ANY OTHER PERSON IN RESPECT OF WHICH HE IS ASSESSABLE, OR OF THE LOSS SUSTAINED BY HIM OR BY SUCH OTHER PERSON, OR OF THE AMOUNT OF REFUND DUE TO HIM OR TO SUCH OTHER PE RSON; (B) EVERY PERSON WHO IS DEEMED TO BE AN ASSESSEE UNDER ANY PROVISION OF THIS ACT; (C) EVERY PERSON WHO IS DEEMED TO BE AN ASSESSEE IN DEFAULT UNDER ANY PROVISION OF THIS ACT; 11. RELYING ON THE ABOVE DEFINITION, THE LEARNED COUNSEL FOR THE APPELLANT HAS CONTENDED THAT THE AP PELLANT IN THE PRESENT CASE IS TO BE CONSIDERED AS AN ASSES SEE, BEING A PERSON BY WHOM ANY TAX OR ANY OTHER SUM OF MONEY IS PAYABLE UNDER THE ACT. ACCORDING TO HIM, T HE PENALTY AMOUNT IN QUESTION IMPOSED BY THE ASSESSING OFFICER AND CONFIRMED BY THE LEARNED CIT(A) BY THE IMPUGNED ORDER IS PAYABLE BY THE ASSESSEE AS PER TH E LETTER DATED 4.8.2011 ISSUED BY THE ASSESSING OFFIC ER. A COPY OF THE SAID LETTER IS PLACED AT PAGE NO.4 OF T HE PAPER- BOOK AND THE CONTENTS THEREOF ARE EXTRACTED BELOW- ...... SIR, SUB: PROSECUTION UNDER SECTION 276C IN THE CASE OF M/S. SUVISTAS SOFTWARE PVT LTD- ASSESSMENT YEAR -2003-04 - COMPOUNDING -REG. REF : YOUR LETTER DATED 15 . 03.2010 FILED IN THE OFFICE OF THE CHIEF COMMISSIONER OF INCOME TAX-3,HYDERABAD ON 19.03.201 0. ******** PLEASE REFER TO THE ABOVE. VIDE THE LETTER CITED IN THE REFERENCE, YOU HAVE RE QUESTED THE CHIEF COMMISSIONER OF INCOME TAX -3, HYDERABAD TO C OMPOUND THE OFFENCE AS PER THE PROVISIONS OF SECTION 279(2) OF THE INCOME TAX ACT 1961 . IN ORDER TO CONSIDER YOUR REQUEST FOR COMPOUNDING OF OFFENCES , THE TAX AS WELL AS INTEREST AND PENALTY RELATING TO THE ASSESSMENT YEAR 2003-04 SHO ULD BE PAID. IT IS VERIFIED FROM THIS OFFICE RECORD, THE T AX DEMAND OF RS . 2,32,554/- RAISED UNDER SECTION 143(3) ON 20.02.200 6 AND PENALTY DEMAND OF RS.2,37,039/- RAISED UNDER SECTIO N 271(1)(C) ON 31.08 . 2006 WERE NOT PAID FULLY . IN THIS CONTEXT. YOU ARE REQUESTED . TO PAY THE AMOUNTS IMMEDIATELY AND FILE THE CHALANS. IF THE AMOUNTS WERE ALREADY PAID , PLEASE PRODUCE THE CHALANS . 4 ITA.NO.1299/HYD/2014 M/S. SUVISTAS SOFTWARE PVT. LTD., HYDERABAD. YOURS FAITHFUL LY , ........ 12. A PERUSAL OF THE ABOVE LETTER DATED 4.8.2011 ISSUED BY THE ASSESSING OFFICER CLEARLY SHOWS THAT THERE IS NOTHING IN THE SAID LETTER TO SHOW THAT THE AMOU NT OF PENALTY IN QUESTION PAYABLE BY THE COMPANY IS SOUGH T TO BE RECOVERED BY THE ASSESSING OFFICER FROM THE APPE LLANT. THE SAID LETTER IS ISSUED BY THE ASSESSING OFFICER IN RESPONSE TO THE REQUEST MADE BY THE APPELLANT TO TH E CHIEF COMMISSIONER FOR COMPOUNDING THE OFFENCE AS PER THE PROVISIONS OF S.279(2) OF THE ACT, AND SINCE IT WAS NECESSARY FOR THE PURPOSES OF CONSIDERING THE SAID REQUEST THAT THE CORRESPONDING DUES ON ACCOUNT OF PENALTY E TC. PAYABLE BY THE COMPANY SHOULD BE PAID, A REQUEST HA S BEEN MADE TO THE APPELLANT TO ARRANGE FOR THE SAID PAYMENT. AS RIGHTLY CONTENDED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE, THERE IS THUS NOTHING IN THE LETTER DATED 4.8.2011 EVEN TO INDICATE THAT THE AMO UNT OF PENALTY IN QUESTION OUTSTANDING IN THE NAME OF THE COMPANY IS PAYABLE BY THE APPELLANT. 13. RELYING ON THE AFORESAID LETTER DATED 4.8.2011 ISSUED BY THE ASSESSING OFFICER, THE LEARN ED COUNSEL FOR THE APPELLANT HAS ALSO CONTENDED THAT PROSECUTION PROCEEDINGS UNDER S.276C OF THE ACT HAV ING BEEN INITIATED AGAINST THE APPELLANT AS A CONSEQUEN CE OF IMPOSITION OF PENALTY UNDER S.271(1)(C), THE APPELL ANT HAS TO BE TREATED AS AN ASSESSEE WITHIN THE MEANING OF CLAUSE (A) OF S.2(7) BEING A PERSON IN RESPECT OF WHOM ANY PROCEEDING UNDER THE ACT HAS BEEN TAKEN. WE ARE UNA BLE TO ACCEPT THIS CONTENTION OF THE LEARNED COUNSEL FO R THE APPELLANT AS WELL. AS PER CLAUSE (A) OF S.2(7), AN ASSESSEE IS DEFINED TO MEAN A PERSON IN RESPECT OF WHOM ANY PROCEEDING UNDER THE ACT HAS BEEN TAKEN FOR THE ASSESSMENT OF HIS INCOME OR OF THE ASSESSMENT OF AN Y OTHER PERSON IN RESPECT OF WHICH HE IS ASSESSABLE A ND THE PROCEEDINGS INITIATED AGAINST THE APPELLANT FOR PRO SECUTION UNDER S.276C OF THE ACT, NOT BEING THE PROCEEDINGS TAKEN FOR THE ASSESSMENT OF HIS INCOME OR OF THE INCOME O F ANY OTHER PERSON IN RESPECT OF WHICH HE IS ASSESSABLE, THE APPELLANT, IN OUR OPINION, CANNOT BE TREATED AS AN ASSESSEE, EVEN AS PER CLAUSE (A) OF SUBS-SECTION (7 ) OF S.2 OF THE ACT. 5 ITA.NO.1299/HYD/2014 M/S. SUVISTAS SOFTWARE PVT. LTD., HYDERABAD. 14. THE LEARNED COUNSEL FOR THE ASSESSEE HAS RELIED ON THE PROVISIONS OF S.179 TO CONTEND THAT T HE APPELLANT BEING A PERSON, WHO WAS THE DIRECTOR OF A PRIVATE COMPANY DURING THE RELEVANT PREVIOUS YEAR, IS JOINTLY AND SEVERALLY LIABLE FOR THE PAYMENT OF TAX RELATING TO THE SAID COMPANY. AS RIGHTLY CONTENDED BY THE LE ARNED DEPARTMENTAL REPRESENTATIVE, THE CAPTION OF THE S.1 79 HOWEVER, CLEARLY INDICATES THAT THE PROVISIONS OF S .179 DEAL WITH THE LIABILITY OF DIRECTORS OF A PRIVATE C OMPANY IN LIQUIDATION AND IN THE PRESENT CASE, ALTHOUGH THE A SSESSEE IS A PRIVATE COMPANY, THE SAME NOT BEING IN LIQUIDA TION, THE APPELLANT, AS A DIRECTOR, CANNOT BE SAID TO BE JOINTLY AND SEVERALLY LIABLE FOR THE PAYMENT OF ANY TAX IN RELATION TO THE SAID COMPANY. 15. IN SUPPORT OF HIS CONTENTION RAISED IN SUPPOR T OF THE APPELLANTS CASE RELYING ON THE PROVISION OF S.179, THE LEARNED COUNSEL FOR THE ASSESSEE HAS RELIED ON THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CA SE OF UNION OF INDIA V/S. MANIK DATTRATREYA LOTLIKAR (SUP RA). A PERUSAL OF THE DECISION RENDERED BY THE HON'BLE BOM BAY HIGH COURT IN THE SAID CASE HOWEVER SHOWS THAT THE CONCERNED PRIVATE COMPANY OF WHICH THE ASSESSEE WAS DIRECTOR WAS ALREADY IN LIQUIDATION AND THE ISSUE I NVOLVED BEFORE THE HON'BLE HIGH COURT WAS ENTIRELY DIFFEREN T, I.E. WHETHER THE PROVISIONS OF S.179 ARE APPLICABLE RETROSPECTIVELY OR NOT. THE LEARNED SINGLE JUDGE HA D EARLIER HELD IN THIS CONTEXT THAT THE LIABILITY OF THE DIRECTOR UNDER S.179 IS ONLY IN RESPECT OF TAX DUE FROM THE PRIVATE COMPANY, AFTER 1 ST OCTOBER, 1975 AND NOT IN RESPECT OF EARLIER PERIOD, AND ON APPEAL PREFERRED BY THE REVE NUE AGAINST THE SAID DECISION BEFORE THE DIVISION BENCH , HON'BLE BOMBAY HIGH COURT HELD THAT THE DIRECTORS O F A PRIVATE COMPANY ARE LIABLE FOR TAX DUE OF THE COMPA NY IN RESPECT OF ASSESSMENT YEARS COMMENCING FROM 1 ST APRIL, 1962. ALTHOUGH IT WAS ALSO HELD BY THE HON'BLE HIGH COURT THAT THE DIRECTORS ARE ALSO LIABLE FOR PENALTY, INT EREST AND RECOVERY CHARGES, THIS PROPOSITION IS SUBSEQUENTLY HELD TO BE NOT A GOOD LAW BY THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF DINESH T. TAILOR V/S.TRO (326 ITR 85), WHEREIN IT WAS HELD THAT S.179 IMPOSES JOINT AND SE VERAL LIABILITY UPON A DIRECTOR OF A PRIVATE COMPANY, ONL Y IN RESPECT OF TAX DUE FROM THE COMPANY WHICH CANNOT BE RECOVERED. A SIMILAR VIEW HAS BEEN EXPRESSED BY THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF KANTILAL 6 ITA.NO.1299/HYD/2014 M/S. SUVISTAS SOFTWARE PVT. LTD., HYDERABAD. SAKARLAL GANDHI V/S. ITO (215 TAXMAN 340), WHEREIN IT WAS HELD THAT A DIRECTOR MAY BE CONSIDERED AN ASSES SEE UNDER S.2(7) BY VIRTUE OF S.179 ONLY QUA TAX OF THE COMPANY WHICH WAS DUE AND REMAINED UNPAID. 16. THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF UNION OF INDIA V/S. MANIK DATTATREYA LOTLIKAR (S UPRA) AND THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF D INESH T. TAILOR V/S. TRO (SUPRA) RELIED ON THE DEFINITION OF THE TERM TAX GIVEN IN S.2(43) WHICH READS AS UNDER- S.2 IN THIS ACT, UNLESS THE CONTEXT OTHERWISE REQU IRES- . (43) TAX IN RELATION TO THE ASSESSMENT YEAR COMME NCING ON THE 1 ST DAY OF APRIL, 1965, AND ANY SUBSEQUENT ASSESSMENT YEAR MEANS INCOME-TAX CHARGEABLE UNDER T HE PROVISIONS OF THIS ACT, AND IN RELATION TO ANY OTHE R ASSESSMENT YEAR INCOME TAX AND SUPER-TAX CHARGEABLE UNDER THE PROVISIONS OF THIS ACT PRIOR TO THE AFORE SAID DATE AND IN RELATION TO THE ASSESSMENT YEAR COMMENCING O N THE 1 ST DAY OF APRIL, 2006, AND ANY SUBSEQUENT YEAR INCLUDE S THE FRINGE BENEFIT TAX PAYABLE UNDER S.115WA. A REFERENCE WAS ALSO MADE BY THE HON'BLE BOMBAY HIG H COURT AND THE HON'BLE GUJARAT HIGH COURT TO OTHER PROVISIONS OF THE ACT SUCH AS S.170, S.177, S.188A, S.189, S.221(1) AND S.226,WHEREIN A DISTINCTION HAS BEEN C LEARLY MADE BY THE PARLIAMENT BETWEEN A TAX AND A PENALTY. IT WAS HELD THAT THE EXPRESSION TAX DUE USED IN S.17 9, THUS, CANNOT COMPREHEND WITHIN THE MEANING OF THAT EXPRESSION LIABILITY TO PAY PENALTY THAT MIGHT HAVE BEEN IMPOSED ON THE COMPANY. 17. IT IS THUS CLEAR THAT BY VIRTUE OF S.179(1), A DIRECTOR OF A PRIVATE COMPANY CAN BE JOINTLY AND SE VERALLY LIABLE FOR THE PAYMENT OF TAX ONLY AND THAT TOO, ON LY IN CASE THAT COMPANY GOES INTO LIQUIDATION. IN THE PRE SENT CASE, SUCH SITUATION, HOWEVER, IS NOT OBTAINED IN A S MUCH AS THE PRIVATE COMPANY OF WHICH THE APPELLANT WAS A DIRECTOR, IS NOT IN LIQUIDATION AND THE AMOUNT PAYA BLE BY THE SAID COMPANY IS ON ACCOUNT OF PENALTY WHICH, IN ANY CASE, CANNOT BE RECOVERED FROM THE APPELLANT AS A D IRECTOR OF THE SAID COMPANY. WE THEREFORE, HOLD THAT THE AP PELLANT IN THE PRESENT CASE CANNOT BE SAID TO BE AN ASSESSE E WITHIN THE MEANING OF S.2(7) AS HE IS NOT A PERSON BY 7 ITA.NO.1299/HYD/2014 M/S. SUVISTAS SOFTWARE PVT. LTD., HYDERABAD. WHOM ANY TAX OR ANY OTHER SUM OF MONEY IS PAYABLE UNDER THE ACT. 18. HAVING HELD THAT THE APPELLANT CANNOT BE CONSIDERED AS AN ASSESSEE WITHIN THE MEANING OF S.2 (7), IT FOLLOWS THAT THE QUESTION OF TREATING THE APPELLANT AS AN ASSESSEE AGGRIEVED, AS ENVISAGED UNDER S.253, DOES NOT ARISE. HOWEVER, SINCE THE LEARNED COUNSEL FOR THE APPELLANT HAS CITED CERTAIN JUDICIAL PRONOUNCEMENTS TO SUPPORT HIS CONTENTIONS RAISED RELYING ON THE PROVI SIONS OF S.253, AND THERE ARE ALSO OTHER JUDICIAL PRONOUNCEM ENTS EXPLAINING THE SCOPE AND MEANING OF THE TERM ASSES SEE AGGRIEVED, WE CONSIDER IT NECESSARY TO DISCUSS AND DEAL WITH THE SAME. IN THE CASE OF KIKABHAI ABDULALI V/S . ITAT & ORS (32 ITR 762), IT WAS NO DOUBT HELD BY THE HON 'BLE BOMBAY HIGH COURT THAT THE RIGHT OF APPEAL TO THE T RIBUNAL AND RIGHT TO APPLY FOR A REFERENCE IS NOT CONFINED TECHNICALLY TO THE PARTY WHO IS A PARTY TO THE APPE AL. IT WAS HOWEVER, CLARIFIED THAT SUCH RIGHT CAN BE EXERC ISED BY ANY PERSON, WHO BECOMES LIABLE TO PAY TAX BY ANY OR DER AGAINST WHICH THE APPEAL IS PREFERRED. AS ALREADY DISCUSSED BY US, THE APPELLANT IN THE PRESENT CASE IS NOT A PERSON WHO HAS BECOME LIABLE TO PAY PENALTY, THE IMPOSITION OF WHICH IS CONFIRMED BY THE LEARNED CIT (A) BY HIS IMPUGNED ORDER AND THEREFORE, HE CANNOT EXERCIS E THE RIGHT OF APPEAL TO THE TRIBUNAL. 19. IN THE CASE OF GOKULDAS V/S. KIKABHAI ABDULALI &ORS (33 ITR 94) AND MAERSK B.V. V/S. DEPU TY DIRECTOR OF INCOME-TAX INTERNATIONAL TAXATION (264 CTR (BOM) 26), THE ISSUE RELATING TO MAINTAINABILITY OF APPEAL FILED BEFORE THE TRIBUNAL WAS INVOLVED IN THE CONTE XT OF PARTNERSHIP FIRMS AND THEIR PARTNERS AND KEEPING IN VIEW THE SPECIFIC PROVISIONS OF S.188A MAKING A PARTNER OF A FIRM AND THE LEGAL REPRESENTATIVE OF SUCH PARTNERS WHO IS DECEASED, JOINTLY AND SEVERALLY LIABLE ALONG WITH T HE FIRM FOR THE AMOUNT OF TAXES, PENALTY OR OTHER SUM PAYAB LE BY THE FIRM, IT WAS HELD BY THE HON'BLE BOMBAY HIGH CO URT THAT THE PARTNER(S) ARE ENTITLED TO FILE APPEALS BE FORE THE TRIBUNAL AGAINST THE ORDERS PASSED IN THE CASE OF F IRM, AS THEY ARE LIABLE OR AT LEAST POTENTIALLY LIABLE TO P AY TAXES AND OTHER SUMS PAYABLE BY THE FIRM. AS ALREADY DISCUSSED BY US, THERE IS NO PROVISION IN THE ACT B Y VIRTUE OF WHICH THE APPELLANT, AS A DIRECTOR, CAN BE HELD LIABLE FOR ANY AMOUNT, ESPECIALLY, THE AMOUNT OF PENALTY PAYAB LE BY THE COMPANY AND HE, THEREFORE, CANNOT BE TREATED AS AN 8 ITA.NO.1299/HYD/2014 M/S. SUVISTAS SOFTWARE PVT. LTD., HYDERABAD. ASSESSEE AGGRIEVED BY THE ORDER OF THE LEARNED CIT( A) CONFIRMING THE PENALTY IMPOSED BY THE ASSESSING OFF ICER UNDER S.271(1)(C) ON THE COMPANY, MAKING HIM ENTITL ED TO FILE AN APPEAL UNDER S.253. 20. IN THE CASE OF CIT V/S. AMBALA FLOUR MILLS (7 8 ITR 256), IT WAS HELD BY THE HON'BLE SUPREME COURT THAT IF A PERSON IS FASTENED WITH THE LIABILITY TO TAX, HE HAS A RIGHT OF APPEAL SO AS TO CHALLENGE THE LIABILITY WI TH WHICH HE IS SOUGHT TO BE FASTENED. IN THE CASE OF CITV/S. N.CH.R.ROW AND CO. (44 ITR 557), HON'BLE CALCUTTA H IGH COURT HELD THAT THE RIGHT TO APPEAL BEFORE THE TRIB UNAL FROM AN ORDER PASSED BY THE AAC IS NOT CONFINED TECHNICALLY TO THE PARTY WHO IS A PARTY TO THE APPE AL BUT IS A MUCH WIDER RIGHT WHICH MIGHT BE EXERCISED BY ANY PERSON WHO IS LIABLE TO PAY TAX BY ANY OTHER ORDER AGAINST WHICH THE APPEAL WAS PREFERRED. IN THE CASE OF MICO EMPLOYEES ASSOCIATION V/S. ACIT (292 ITR 567) BEFOR E THE HON'BLE KARNATAKA HIGH COURT, THERE WAS A DISPUTE BETWEEN THE MICO EMPLOYEES ASSOCIATION AND THE DEPARTMENT REGARDING TDS VIS--VIS SERVICE OF EMPLO YEES AND THE APPEAL FILED BY THE EMPLOYEES ASSOCIATION W AS HELD TO BE NOT MAINTAINABLE BY THE HON'BLE HIGH COU RT HOLDING THAT ONLY AN ASSESSEE WHOSE LIABILITY IS TO PAY TAX IN TERMS OF AN ORDER, IS PROVIDED WITH THE RIGHT OF APPEAL UNDER S.253. IT WAS HELD THAT THOUGH THE EMPLOYEES ASSOCIATION MIGHT BE AN AGGRIEVED PARTY TO CERTAIN EXTENT, IT WAS NOT AN ASSESSEE IN TERMS OF DEFINITION GIVEN IN S.2(7) OF THE ACT, WHICH WOULD MEAN A PERSON FROM W HOM ANY TAX OR A SUM OF MONEY IS PAYABLE. IT WAS HELD T HAT IN TERMS OF THE STATUTE ONLY THE ASSESSEE WHO IS LIABL E TO PAY TAX IN TERMS OF THE ORDER ALONE IS PROVIDED WITH TH E RIGHT TO APPEAL, THOUGH, TO A CERTAIN EXTENT, ASSOCIATION MA Y BE AN AGGRIEVED PARTY, IT IS NOT AN ASSESSEE. IT WAS HELD THAT NO APPEAL, THEREFORE, COULD HAVE BEEN FILED BY THE ASS OCIATION IN TERMS OF THE ACT. 21. THE LEGAL POSITION CLEARLY EMANATING FROM THE JUDICIAL PRONOUNCEMENTS DISCUSSED ABOVE THUS IS THA T THE TERM ASSESSEE AGGRIEVED USED IN S.253(1), BEING A PERSON COMPETENT TO FILE AN APPEAL BEFORE THE TRIBU NAL, IS ONLY THE PERSON WHO IS AN AGGRIEVED PARTY LIABLE TO PAY TAX IN TERMS OF THE ORDER AGAINST WHICH THE APPEAL IS TO BE PREFERRED. AS ALREADY DISCUSSED BY US, THERE IS NO TAX PAYABLE BY THE APPELLANT IN THE PRESENT CASE AS A R ESULT OF THE IMPUGNED ORDER PASSED BY THE LEARNED CIT(A), AN D 9 ITA.NO.1299/HYD/2014 M/S. SUVISTAS SOFTWARE PVT. LTD., HYDERABAD. CONSEQUENTLY, HE CANNOT TREATED AS AN AGGRIEVED PA RTY. WE, THEREFORE, HOLD THAT THE APPELLANT IS NOT ENTIT LED TO FILE THE PRESENT APPEAL AGAINST THE IMPUGNED ORDER PASS ED BY THE LEARNED CIT(A) CONFIRMING THE PENALTY IMPOSE D BY THE ASSESSING OFFICER UNDER S.271(1)(C) ON THE COMP ANY AND CONSEQUENTLY THE PRESENT APPEAL, BEING NOT MAINTAINABLE, IS LIABLE TO BE DISMISSED IN LIMINE. WE ACCORDINGLY DISMISS THIS APPEAL HOLDING THE SAME TO BE NOT MAINTAINABLE. 3. AS THE ISSUE INVOLVED IN THE PRESENT CASE AS WE LL AS ALL THE MATERIAL FACTS RELEVANT THERETO ARE SIMILAR TO THAT OF ITA.NO.1475/HYD/2014, WE RESPECTFULLY FOLLOW THE DE CISION RENDERED BY THE TRIBUNAL IN THE SAID CASE AND DISMI SS THIS APPEAL AS NOT MAINTAINABLE. 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMIS SED AS NOT MAINTAINABLE. ORDER PRONOUNCED IN THE OPEN COURT ON 27.03.201 5. SD/- SD/- (ASHA VIJAYARAGHAVAN) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 27 TH MARCH, 2015 VBP/- COPY TO 1. MR. R. SUBBA RAO, FORMER MANAGING DIRECTOR, M/S. SUVASTAS SOFTWARE P. LTD., HYDERABAD. C/O. MR.S.RAM A RAO, ADVOCATE, FLAT NO.102, SHRIYAS ELEGANCE, ROAD NO.9, HIMAYATNAGAR, HYDERABAD 29. 2. THE INCOME TAX OFFICER, WARD 3 (2), I.T.TOWERS, HYD ERABAD. 3. CIT(A)-IV, HYDERABAD. 4. CIT-III, HYDERABAD 5. D.R. I.T.A.T. A BENCH, HYDERABAD. 6. GUARD FILE