THE COMMISSIONER OF INCOME TAX-II,COCHIN vs. P.SREENIVASAN,CHENNAI

The respondent herein was made aware of the determination of income and demand raised, only when recovery steps were initiated. The respondent was also proceeded against for reason of he being a partner of the firm. The respondent asserted that he was not a partner and to stall the recovery proceedings, the respondent approached this Court with W.P.(C) No.13544 of 2005 on 18.04.2005. Despite that contention, the respondent also filed an appeal from the assessment order, as seen from the memorandum produced at Annexure-D, on 28.05.2005. The writ - 3 - petition was disposed of by Annexure-H order dated 23.08.2005, which directed the CIT (Appeals) to peruse the records, hear the writ petitioner and the concerned Assessing Officer [AO] and dispose of the appeal within six weeks from the date of receipt of a copy of the judgment. There was also a stay granted against the sale of attached properties until the appeal was disposed of. Later, by Annexure-E order dated 27.09.2005, the first appeal filed by the respondent was disposed of, making some quantum adjustments. The Revenue filed an appeal to the Tribunal [Annexure-I] and also approached this Court with a review petition in the writ petition, numbered as R.P.No.52 of 2006, which was disposed of by Annexure-L dated 05.04.2006. 3. The review of the Revenue raised a ground that the appeal of the firm was rejected and there could not be any subsequent appeal filed by the Partner before the first appellate authority. The assessment stands confirmed by the first appellate authority, which order has acquired finality was the sole ground raised. Immediately we have to notice that the first appeal filed by the firm was dismissed only for reason of the admitted tax having not been paid and there was no consideration on merits.

The learned Senior Counsel, Government of India (Taxes) points out that the right given to a partner to - 4 - file an appeal under Section 247 of the Income Tax Act, 1961 was omitted by Finance Act, 1992 with effect from 01.04.1993. However, such a ground was never raised before the learned Single Judge even in the review petition. In any event, the learned Single Judge noticed that the Revenue had already approached the Tribunal against the order of the first appellate authority in the appeal filed by the Partner and, hence, directed the Tribunal to consider whether the appeal was maintainable before the first appellate authority. The Tribunal considered the appeal filed by the Revenue, by Annexure-J order dated 06.01.2012. 5. As noticed from Annexure-J, the date of hearing was 03.01.2012. We see from the order of the Tribunal that though an objection was raised with respect to the maintainability of the appeal by the Revenue before the Tribunal, on the very same grounds as raised in the Review Petition, the Tribunal refused to consider the same since the High Court had already directed consideration on merits. It is unfortunate that the Revenue did not place the order of the learned Single Judge in the Review Petition passed six years prior, before the Tribunal. The learned Senior Counsel, Government of India (Taxes) would submit that since the CIT (Appeals) at the second instance - 5 - had acted without jurisdiction, the order is non est in law. However, we do not find any reason to hold so in an appeal since the Revenue has not raised such contentions before the first appellate authority or before the Tribunal nor even before this Court in the Review Petition.

We also notice that the original demand as is revealed from Annexure-C was only Rs.15,02,720/-, which is far lesser than that prescribed in the litigation policy.