All Cargo Global Logistics Ltd. v. Deputy Commissioner of Incometax

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The Tax Publishers2012 TaxPub(DT) 2264 (Mum-Trib) : (2012) 137 ITD 0026 : (2012) 146 TTJ 0657 : (2012) 072 DTR 0001 : (2012) 016 ITR (Trib) 0380 INCOME TAX ACT, 1961 --Appeal [Tribunal]--Maintainability Jurisdictional issue not raised before lower authorities--A sum of Rs. 26,85,820 had already been disallowed by the assessing officer in the proceedings of assessment year 2004-05. No incriminating material had been found in regard to the deduction under section 80-IA(4) in the course of search. The assessee had already taken ground No. 3 before the Commissioner (Appeals) challenging the action of the assessing officer in disallowing the deduction. The present ground is in furtherance of the same ground which the assessee can validly take in the light of the decision in the case of Shaik Ibrahim wherein it is mentioned that the mere fact with the assessee, not having appreciated his legal rights failed to raise the contention before the ITO or the AAC, where he was not represented by a lawyer but by his auditor, who not being qualified in law, was not competent to appreciate the principles of law cannot be denied the right to raise that question at the stage of the appeal before the Tribunal, which is also a forum both on question of fact as well as law. Held: The fact is that jurisdictional question as posed before the Tribunal had not been raised before the lower authorities. It has also been held that question No. 3 before the Commissioner (Appeals) is qualitatively different from question No. 1. Therefore, the question does not arise out of the orders of the lower authorities. The question which has not been raised before any of the lower authorities and obviously not decided by any one of them, cannot lead to a grievance in respect of which a ground can be validly taken in the memorandum of appeal. Therefore, Tribunal tends to agree with the Standing Counsel that ground No. 1 in the memorandum of appeal cannot be a ground validly taken as a grievance from the order of lower authorities. The question whether it can be admitted as an additional ground is all together a different matter. Thus, it is held that the ground as it stands could not have been taken in the memorandum of appeal. On bare perusal of section 153A, the provision starts with non obstante clause in respect of sections 139, 147, 148, 149, 151 and 153 ; and it provides that where search has been initiated under section 132 or books of account, other documents or any assets or cash etc. have been requisitioned under section 132A after 31-5-2003, the assessing officer shall proceed in the manner provided in clause (a) and clause (b) of this sub-section. Clause (a) is regarding issue of notice to such a person to require him to furnish the return of income. Since the provision overrides section 147 and section 148, Tribunal shall refrain from taking analogy from these provisions for the purpose of assessment or reassessment under section 153A. However, the provision clearly empowers the assessing officer to issue notice in a case where search is initiated after 31-5-2003. This condition is satisfied in the instant case. Therefore, Tribunal is not in a position to pursuade itself to agree with the counsel that the two questions or more or less the same, even when question No. 3 before the Commissioner (Appeals) is read widely. The question before the Commissioner (Appeals) may be in regard to jurisdiction to disallow deduction already granted and in respect of which no material has been found in search. However, question No. 1 is an upfront question which debars jurisdiction under section 153A all together. The question is qualitatively different from the question raised before the Commissioner (Appeals). Thus, Tribunal is not able to sustain the submissions of the counsel in this behalf. [Para 7] Secondly, the Standing Counsel has raised a plea that barring the jurisdiction would lead to a conclusion that proceedings under section 153A are all together bad in law. This would mean that income voluntarily surrendered by the assessee in the return under section 153A, on which tax has been paid, will have to be refunded to the assessee. This will amount to great prejudice to the revenue as even admitted tax will have to be refunded on the basis of interpretation sought to be placed by the counsel on the statutory provision. On the other hand, counsel has drawn attention to the provision contained in clause (b) of section 240 to the effect that if an order of assessment is annulled the refund shall become due only of the amount, if any, of the tax paid in excess of the tax chargeable on the total income returned by the assessee. It is submitted that the assessee had himself disallowed certain amounts including a sum of Rs. 3,50,000 in respect of claim under section 80-IA. Tax has been paid by way of self assessment on filing the return under section 153A. In view of the aforesaid provision, the assessee is not entitled to the refund of the tax paid even if the assessment is annulled or held to be in excess of power granted to the assessing officer under section 153A. Tribunal has considered this matter also. The provision is clear that on account of appeal if the order of assessment is annulled, the amount paid by the assessee at the time of filing the return is not be refunded to the assessee. In the context of the section, the assessment will include reassessment also. Therefore, the prejudice to the revenue, if the ground is admitted, will only be a legal grievance not leading to loss of revenue in so far as returned income is concerned. Accordingly this plea of the Standing Counsel is rejected. [Para 7.1] The third question is whether, the ground taken by the assessee is an additional ground? The facts in this connection are that the ground was not taken before Commissioner (Appeals) or assessing officer. Thus, no order is available from the lower authorities on this issue. The case of the Counsel is rather simple that the ground has been taken in the memorandum of appeal, therefore, it is not an additional ground for which leave is required from the Tribunal. On the other hand, the case of the Standing Counsel is that the ground does not arise out of the order of lower authorities as this question was never taken up before any one of them. Tribunal has considered this matter also. Section 253(1) uses the words 'aggrieved'. A person as appellant can be aggrieved only if the ground had been raised and it is decided against him. It may also include a case where the ground is raised but has not been decided by the Commissioner (Appeals). Therefore, section 253(1) bars a ground which was not raised and therefore not decided by the Commissioner (Appeals). There cannot be any grievance in respect of a matter where it is not raised at all. Further, provision under section 254(1) under which the Tribunal is authorised to pass order on the appeal after granting opportunity to both the parties of being heard uses the words 'pass such orders thereon as it thinks fit'. Accordingly, this is a stage subsequent to filing the appeal. By this time, the question regarding right of the assessee to take certain grounds, additional grounds etc. in respect of the appeal come to an end. Many other considerations may come into picture before and at the time of passing the order. Thus, Tribunal will defer the discussion on this issue and confine it selves only to section 253(1) and the interpretation of the word 'aggrieved' for the time being. [Para 7.2] The fact is that jurisdictional question as posed before the Tribunal had not been raised before the lower authorities. It has also been held that question No. 3 before the Commissioner (Appeals) is qualitatively different from question No. 1 before us. Therefore, the question does not arise out of the orders of the lower authorities. [Para 7.2] The question which has not been raised before any of the lower authorities and obviously not decided by any one of them, cannot lead to a grievance in respect of which a ground can be validly taken in the memorandum of appeal. Therefore, Tribunal tend to agree with the Standing Counsel that ground No. 1 in the memorandum of appeal cannot be a ground validly taken as a grievance from the order of lower authorities. The question whether it can be admitted as an additional ground is all together a different matter. Thus it is held that the ground as it stands could not have been taken in the memorandum of appeal. [Para 7.2] SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2012 TaxPub(DT) 2264 (Mum-Trib) : (2012) 137 ITD 0026 : (2012) 146 TTJ 0657 : (2012) 072 DTR 0001 : (2012) 016 ITR (Trib) 0380

INCOME TAX ACT, 1961

--Appeal [Tribunal]--Maintainability Jurisdictional issue not raised before lower authorities--A sum of Rs. 26,85,820 had already been disallowed by the assessing officer in the proceedings of assessment year 2004-05. No incriminating material had been found in regard to the deduction under section 80-IA(4) in the course of search. The assessee had already taken ground No. 3 before the Commissioner (Appeals) challenging the action of the assessing officer in disallowing the deduction. The present ground is in furtherance of the same ground which the assessee can validly take in the light of the decision in the case of Shaik Ibrahim wherein it is mentioned that the mere fact with the assessee, not having appreciated his legal rights failed to raise the contention before the ITO or the AAC, where he was not represented by a lawyer but by his auditor, who not being qualified in law, was not competent to appreciate the principles of law cannot be denied the right to raise that question at the stage of the appeal before the Tribunal, which is also a forum both on question of fact as well as law. Held: The fact is that jurisdictional question as posed before the Tribunal had not been raised before the lower authorities. It has also been held that question No. 3 before the Commissioner (Appeals) is qualitatively different from question No. 1. Therefore, the question does not arise out of the orders of the lower authorities. The question which has not been raised before any of the lower authorities and obviously not decided by any one of them, cannot lead to a grievance in respect of which a ground can be validly taken in the memorandum of appeal. Therefore, Tribunal tends to agree with the Standing Counsel that ground No. 1 in the memorandum of appeal cannot be a ground validly taken as a grievance from the order of lower authorities. The question whether it can be admitted as an additional ground is all together a different matter. Thus, it is held that the ground as it stands could not have been taken in the memorandum of appeal.

On bare perusal of section 153A, the provision starts with non obstante clause in respect of sections 139, 147, 148, 149, 151 and 153 ; and it provides that where search has been initiated under section 132 or books of account, other documents or any assets or cash etc. have been requisitioned under section 132A after 31-5-2003, the assessing officer shall proceed in the manner provided in clause (a) and clause (b) of this sub-section. Clause (a) is regarding issue of notice to such a person to require him to furnish the return of income. Since the provision overrides section 147 and section 148, Tribunal shall refrain from taking analogy from these provisions for the purpose of assessment or reassessment under section 153A. However, the provision clearly empowers the assessing officer to issue notice in a case where search is initiated after 31-5-2003. This condition is satisfied in the instant case. Therefore, Tribunal is not in a position to pursuade itself to agree with the counsel that the two questions or more or less the same, even when question No. 3 before the Commissioner (Appeals) is read widely. The question before the Commissioner (Appeals) may be in regard to jurisdiction to disallow deduction already granted and in respect of which no material has been found in search. However, question No. 1 is an upfront question which debars jurisdiction under section 153A all together. The question is qualitatively different from the question raised before the Commissioner (Appeals). Thus, Tribunal is not able to sustain the submissions of the counsel in this behalf. [Para 7] Secondly, the Standing Counsel has raised a plea that barring the jurisdiction would lead to a conclusion that proceedings under section 153A are all together bad in law. This would mean that income voluntarily surrendered by the assessee in the return under section 153A, on which tax has been paid, will have to be refunded to the assessee. This will amount to great prejudice to the revenue as even admitted tax will have to be refunded on the basis of interpretation sought to be placed by the counsel on the statutory provision. On the other hand, counsel has drawn attention to the provision contained in clause (b) of section 240 to the effect that if an order of assessment is annulled the refund shall become due only of the amount, if any, of the tax paid in excess of the tax chargeable on the total income returned by the assessee. It is submitted that the assessee had himself disallowed certain amounts including a sum of Rs. 3,50,000 in respect of claim under section 80-IA. Tax has been paid by way of self assessment on filing the return under section 153A. In view of the aforesaid provision, the assessee is not entitled to the refund of the tax paid even if the assessment is annulled or held to be in excess of power granted to the assessing officer under section 153A. Tribunal has considered this matter also. The provision is clear that on account of appeal if the order of assessment is annulled, the amount paid by the assessee at the time of filing the return is not be refunded to the assessee. In the context of the section, the assessment will include reassessment also. Therefore, the prejudice to the revenue, if the ground is admitted, will only be a legal grievance not leading to loss of revenue in so far as returned income is concerned. Accordingly this plea of the Standing Counsel is rejected. [Para 7.1] The third question is whether, the ground taken by the assessee is an additional ground? The facts in this connection are that the ground was not taken before Commissioner (Appeals) or assessing officer. Thus, no order is available from the lower authorities on this issue. The case of the Counsel is rather simple that the ground has been taken in the memorandum of appeal, therefore, it is not an additional ground for which leave is required from the Tribunal. On the other hand, the case of the Standing Counsel is that the ground does not arise out of the order of lower authorities as this question was never taken up before any one of them. Tribunal has considered this matter also. Section 253(1) uses the words 'aggrieved'. A person as appellant can be aggrieved only if the ground had been raised and it is decided against him. It may also include a case where the ground is raised but has not been decided by the Commissioner (Appeals). Therefore, section 253(1) bars a ground which was not raised and therefore not decided by the Commissioner (Appeals). There cannot be any grievance in respect of a matter where it is not raised at all. Further, provision under section 254(1) under which the Tribunal is authorised to pass order on the appeal after granting opportunity to both the parties of being heard uses the words 'pass such orders thereon as it thinks fit'. Accordingly, this is a stage subsequent to filing the appeal. By this time, the question regarding right of the assessee to take certain grounds, additional grounds etc. in respect of the appeal come to an end. Many other considerations may come into picture before and at the time of passing the order. Thus, Tribunal will defer the discussion on this issue and confine it selves only to section 253(1) and the interpretation of the word 'aggrieved' for the time being. [Para 7.2] The fact is that jurisdictional question as posed before the Tribunal had not been raised before the lower authorities. It has also been held that question No. 3 before the Commissioner (Appeals) is qualitatively different from question No. 1 before us. Therefore, the question does not arise out of the orders of the lower authorities. [Para 7.2] The question which has not been raised before any of the lower authorities and obviously not decided by any one of them, cannot lead to a grievance in respect of which a ground can be validly taken in the memorandum of appeal. Therefore, Tribunal tend to agree with the Standing Counsel that ground No. 1 in the memorandum of appeal cannot be a ground validly taken as a grievance from the order of lower authorities. The question whether it can be admitted as an additional ground is all together a different matter. Thus it is held that the ground as it stands could not have been taken in the memorandum of appeal. [Para 7.2]