Ms. Sujatha Nageswaran, CHENNAI V. ACIT, CHENNAI

ITA 77/CHNY/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96088 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2015
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 26-08-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 17-01-2013
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: K RAVI
• Keywords: Period of limitation; Right to appeal; Condonation of delay

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI . . . , ! , ' #$ % [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ] ./ I.T.A.NO.77/MDS/2013 / ASSESSMENT YEAR : 2006-07 MS SUJATHA NAGESWARAN 24/5 D'MONTE ROAD CHENNAI 600 004 VS. THE ASSTT. COMMISSIONER OF INCOME-TAX COMPANY CIRCLE I(3) CHENNAI [PAN AETPS 4508 G] ( &' / APPELLANT) ( ()&' /RESPONDENT) / APPELLANT BY : SHRI K. RAVI, ADVOCATE /RESPONDENT BY : SHRI P. RADHAKRISHNAN, JCIT / DATE OF HEARING : 26 - 08 - 2015 / DATE OF PRONOUNCEMENT : 04 - 09 - 2015 / O R D E R PER N.R.S.GANESAN, JUDICIAL MEMBER THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-III, CHEN NAI, DATED 14.9.2012 AND PERTAINS TO ASSESSMENT YEAR 2006-07. 2. SHRI K. RAVI, LD. COUNSEL FOR THE ASSESSEE SUBMITTE D THAT THE ASSESSING OFFICER LEVIED PENALTY U/S 271(1)(C) OF THE ACT. THE ASSESSEE CHALLENGED THE CORRECTNESS OF THE ORDER OF THE ASSESSING OFFICER LEVYING PENALTY U/S 271(1)(C) OF THE ACT BEFORE THE CIT(A). ITA NO. 77/13 :- 2 -: HOWEVER, THE CIT(A) DISMISSED THE APPEAL OF THE AS SESSEE ON THE GROUND THAT THE ADMITTED TAX ON THE INCOME DISCLOSE D IN THE RETURN OF INCOME WAS NOT PAID. THE LD. COUNSEL FURTHER SUBMI TTED THAT NOW THE ASSESSEE HAS PAID THE ADMITTED TAX AND PRODUCED COP IES OF A FEW CHALLANS BEFORE THIS TRIBUNAL. THE LD. COUNSEL SUB MITTED THAT THE MATTER MAY BE REMANDED BACK TO THE FILE OF THE CIT( A) FOR RECONSIDERATION. 3. WE HEARD SHRI P. RADHAKRISHNAN, LD. DEPARTMENTAL REPRESENTATIVE ALSO. SINCE THE ASSESSEE NOW CLAIM S THAT THE ADMITTED TAX WAS PAID, THE LD. DR SUBMITTED THAT THE MATTER MAY BE REMANDED BACK TO THE FILE OF THE CIT(A) FOR VERIFICATION OF THE CHALLANS AND THEREAFTER DISPOSE OF THE APPEAL ON MERIT. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE FILED THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2006-07 AD MITTING A TOTAL INCOME OF ` 2,96,54,237/- AND COMPUTED THE SELF-ASSESSMENT TAX AT ` 1,51,50,267/-. HOWEVER, THE ASSESSEE APPEARS TO H AVE PAID TAX OF ONLY ` 5 LAKHS ON 14.7.2008. FROM THE MATERIALS AVAILAB LE ON RECORD IT APPEARS THAT SUBSEQUENTLY THE ASSESSEE HAS PAID ANOTHER SUM OF ` 2 LAKHS ON 2.12.2009 TOWARDS THE ADMITTED TAX. THE CI T(A), AFTER REFERRING TO THE PROVISIONS OF SECTION 249(4)OF THE ACT, FOUND THAT THE ITA NO. 77/13 :- 3 -: ASSESSEE HAS NOT PAID THE ADMITTED TAX ON THE INCOM E RETURNED, THEREFORE, HE REJECTED THE APPEAL OF THE ASSESSEE. AGAINST THAT ORDER, THE ASSESSEE FILED THE PRESENT APPEAL BEFORE THIS TRIBUNAL. 5. WE HAVE GONE THROUGH THE PROVISIONS OF SECTION 249( 4) OF THE ACT. SEC. 249(4) OF THE ACT CLEARLY SAYS THAT NO APPEAL SHALL BE ADMITTED UNLESS AT THE TIME OF FILING OF THE APPEAL THE ASSESSEE HAS PAID THE TAX ON THE INCOME RETURNED. IN THIS CASE, ADMITTEDLY, THE TAX ON THE ADMITTED INCOME WAS NOT PAID AT THE TIME OF FILING OF THE APPEAL. 6. WE FIND THAT THE APEX COURT IN CIT VS FILMISTAN LTD , [1961] 42 ITR 163, HAD AN OCCASION TO CONSIDER AN IDENTICA L SITUATION. THE APEX COURT, AFTER REFERRING TO THE PROVISIONS OF SE CTION 30(I) OF THE INCOME-TAX ACT, 1922, FOUND THAT THE APPEAL HAS TO BE TREATED AS FILED ON THE DAY ON WHICH THE TAX WAS PAID EVEN THOUGH TH E MEMORANDUM OF APPEAL WAS PRESENTED EARLIER WITHIN THE PERIOD O F LIMITATION. IN FACT, THE APEX COURT HAS OBSERVED AS FOLLOWS AT PAGES 165 & 166 OF THE ITR: THE CONTENTION WHICH WAS RAISED BEFORE US WAS THAT THESE WORDS MEAN THAT THERE IS NO RIGHT OF APPEAL TILL TH E TAX PAID AND, THEREFORE, IF THE TAX HAS NOT BEEN PAID THE MEMORAND UM OF APPEAL CANNOT BE FILED AND IF FILED IT IS MERELY A WASTE P APER. IN OUR OPINION THE MEANING OF THE WORDS 'NO APPEAL SHALL L IE' IN THE PROVISO IS NOT THAT NO MEMORANDUM OF APPEAL CAN BE PRESENTED. ALL THAT IT MEANS IS THAT THE APPEAL WILL NOT BE HELD T O BE PROPERLY ITA NO. 77/13 :- 4 -: FILED UNTIL THE TAX HAS BEEN PAID. IF, FOR INSTANCE, THE MEMORANDUM OF APPEAL IS FILED ON THE 20TH DAY, I.E., 10 DAYS BEFORE THE PERIOD OF LIMITATION EXPIRES AND THE TAX I S PAID WITHIN THE REST OF THE 10 DAYS, THE APPEAL WILL BE A PROPER APPEAL; IT WILL BE WITHIN TIME AND NO QUESTION OF LIMITATION WILL A RISE BUT IF THE TAX IS PAID AFTER THE PERIOD OF LIMITATION AS EXPIRED IT WILL BE TAKEN TO HAVE BEEN FILED ON THE DAY WHEN THE TAX IS PAID EVEN THOUGH THE MEMORANDUM OF APPEAL WAS PRESENTED EARLI ER AND WITHIN THE PERIOD THE LIMITATION. THE QUESTION WILL THEN HAVE TO BE DECIDED WHETHER THERE WAS SUFFICIENT CAUSE FOR COND ONATION OF DELAY AND THAT IS EXACTLY WHAT THE TRIBUNAL HAD ORDE RED AND THAT IN OUR OPINION IS THE EFFECT OF THE PROVISO TO SECT ION 30(I) READ WITH SUB-SECTION (2) OF SECTION 30 OF THE ACT. 7. IN 1922 ACT, THE LANGUAGE USED BY THE PARLIAMENT WA S NO APPEAL SHALL LIE. THE APEX COURT FOUND THAT IT DO ES NOT MEAN THAT MEMORANDUM OF APPEAL CANNOT BE PRESENTED. ALL THAT IT MEANS THAT THE APPEAL WILL NOT BE HELD TO BE PROPERLY FILED UN TIL THE TAX HAS BEEN PAID. IN 1961 ACT, INITIALLY SUCH A PROHIBITION WA S NOT THERE IN THE STATUTE, HOWEVER, THE PARLIAMENT BY WAY OF AN AMEN DMENT BY FINANCE ACT, 1975, WITH EFFECT FROM 1.10.1975, INTRODUCED C LAUSE (4) IN SECTION 249 WHICH READS AS FOLLOWS: (4) NO APPEAL UNDER THIS CHAPTER SHALL BE ADMITTED UNLESS 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 (B) WHERE NO RETURN HAS BEEN FILED BY THE ASSESSEE, THE ASSESSEE HAS PAID AN AMOUNT EQUAL TO THE AMOUNT OF ADVANCE TAX WHICH WAS PAYABLE BY HIM ; ITA NO. 77/13 :- 5 -: PROVIDED THAT IN A CASE FALLING UNDER CLAUSE (B) A ND ON AN APPLICATION MADE BY THE APPELLANT IN THIS BEHALF, T HE COMMISSIONER (APPEALS) MAY, FOR ANY GOOD AND SUFFICIENT REASON T O BE RECORDED IN WRITING, EXEMPT HIM FROM THE OPERATION OF THE PRO VISIONS OF THAT CLAUSE. 8. IN 1922 ACT, THE TERM USED BY THE PARLIAMENT WAS N O APPEAL SHALL LIE. HOWEVER, IN 1961 ACT, AS INTRODUCED BY FINANCE ACT, 1975, THE LANGUAGE USED IN SECTION 249(4) IS NO APPEAL S HALL BE ADMITTED. THEREFORE, THERE IS NO PROHIBITION FOR FILING OF TH E APPEAL WITHOUT PAYMENT OF ADMITTED TAX. IN OTHER WORDS, THE APPEA L CAN BE PRESENTED WITHOUT PAYMENT OF THE ADMITTED TAX. HOW EVER, THE CIT(A) CANNOT ADMIT THE APPEAL AND HE HAS TO ISSUE A DEFEC T MEMO ASKING THE ASSESSEE TO PAY THE ADMITTED TAX WITHIN THE TIME LI MIT THAT WOULD BE FIXED BY THE CIT(A). NORMALLY, THE TIME LIMIT FIXED BY THE CIT(A) SHALL BE WITHIN THE TIME LIMIT PROVIDED FOR FILING OF APP EAL. ONCE THE ADMITTED TAX WAS PAID WITHIN THE TIME LIMIT PRESCRI BED IN THE DEFECT MEMO ISSUED BY THE CIT(A), THE APPEAL HAS TO BE TRE ATED AS IF THE SAME WAS FILED WITHIN THE PERIOD OF LIMITATION. HOWEVER, IF THE ASSESSEE FAILS TO PAY THE ADMITTED TAX WITHIN THE T IME LIMIT FIXED IN THE DEFECT MEMO, THE QUESTION WOULD BE WHETHER THERE IS SUFFICIENT CAUSE FOR CONDONATION OF DELAY IN PAYMENT OF ADMITTED TAX . IF THERE IS SUFFICIENT CAUSE FOR NOT PAYING THE ADMITTED TAX, T HEN THE DELAY MAY BE ITA NO. 77/13 :- 6 -: CONDONED. ONCE THE DELAY IN PAYMENT OF ADMITTED T AX IS CONDONED, THE APPEAL SHALL BE ADMITTED AS IF THE ADMITTED TAX WAS PAID. 9. NOW THE ASSESSEE CLAIMS THAT THE ENTIRE ADMITTED T AX HAS BEEN PAID AND THE COPIES OF A FEW CHALLANS WERE PRO DUCED BEFORE THIS TRIBUNAL. HOWEVER, THE CORRECTNESS/GENUINENESS OF THE CHALLANS HAS TO BE VERIFIED BY THE CIT(A). WHEN THE LANGUAGE OF TH E PROVISION WAS NO APPEAL SHALL LIE IN 1922 ACT, THE APEX COURT FOUND THAT THE DELAY IN PAYMENT OF ADMITTED TAX CAN BE CONDONED. THEREFOR E, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT IF THERE IS A DEL AY IN PAYMENT OF THE ADMITTED TAX, SUCH A DELAY CAN BE CONDONED BY THE C IT(A) HIMSELF BY TAKING INTO CONSIDERATION THE REASONS FOR NOT PAY ING THE ADMITTED TAX. IN VIEW OF THE ABOVE SITUATION, MORE PARTICULARLY, THE CLAIM OF THE ASSESSEE THAT TAX HAS NOW BEEN PAID, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATTER NEEDS TO BE VERI FIED BY THE CIT(A) AND THEREAFTER DECIDE THE MATTER IN ACCORDANCE WITH LAW. ACCORDINGLY, THE ORDER OF THE CIT(A) IS SET ASIDE AND THE ENTIRE ISSUE OF LEVY OF PENALTY IS REMANDED BACK TO THE FILE OF THE CIT(A). THE CIT(A) SHALL VERIFY THE GENUINENESS OF THE CHALLANS FILED BY THE ASSESSEE FOR PAYMENT OF THE ADMITTED TAX AND THEREAFTER DECIDE T HE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER GIVING A REASONABLE OPPOR TUNITY TO THE ASSESSEE. ITA NO. 77/13 :- 7 -: 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH OF SEPTEMBER, 2015, AT CHENNAI. SD/- SD/- ( ! ) (CHANDRA POOJARI) ' / ACCOUNTANT MEMBER ( . . . ! ) (N.R.S. GANESAN) / JUDICIAL MEMBER '# / CHENNAI $% / DATED: 4 TH SEPTEMBER, 2015 RD %&'' ()'*) / COPY TO: ' 1 . / APPELLANT 4. ' + / CIT 2. / RESPONDENT 5. ),-' . / DR 3. ' +'/! / CIT(A) 6. -0'1 / GF