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Income Tax Appellate Tribunal, DELHI BENCH: ‘C’: NEW DELHI
Before: SH. H.S. SIDHU & SH. O.P. KANT
ORDER PER O.P. KANT, A.M.: The present appeal by the assessee is directed against the order dated 29.05.2015 passed by Commissioner of Income Tax (Exemptions), Lucknow under Section 154 of the Income-tax Act, 1961 (for short “the Act”), raising the following grounds of appeal: i. That having regard to the facts and circumstances of the case, learned Commissioner of Income Tax (Exemption) has erred in law and on facts in rejecting the application u/s 154 filed by the assessee that too without appreciating the facts and circumstances of the case and without giving adequate opportunity of hearing. ii. That having regard to the facts and circumstances of the case, learned Commissioner of Income Tax (Exemption) has erred in law and on facts
2 in not appreciating the established position of law as explained by assessee in its petition u/s 154 of the Act. iii. That in any case and in any view of the matter, action of learned Commissioner of Income Tax(Exemption) in passing the impugned order u/s 154 and not allowing the relief as claimed by the assessee in application filed is bad in law and against the facts and circumstances of the case. iv. That having regard to the facts and circumstances of the case, learned Commissioner of Income Tax (Exemption) has erred in law and on facts in passing the impugned order u/s 154 which is bad in law, illegal, beyond jurisdiction, barred by limitation, having been passed in violation of principles of natural justice and without providing adequate opportunity of hearing and by recording incurred facts and findings. v. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other.
2. The facts in brief are that on appeal by the assessee against the denial of registration under section 12A/12AA of the Income-tax Act (here-in-after referred as ‘Act’) by the Commissioner of Income-tax , the Tribunal in its order dated 31.01.2007 in ITA No. 2903/Del/2006, directed the Commissioner of Income Tax to grant registration as per the provisions of Section 12AA of the Act, with direction as under: “6. We had carefully gone through the above order of ITAT and found that under the similar facts and circumstances the local authorities was held to be eligible for registration under Section 12AA of the Income Tax Act.
7. In the result, appeal of the assessee is allowed. ” 2.1 In compliance to the above direction, the Commissioner of Income Tax issued order on 20.09.2010 granting registration to the assessee. The relevant portion of the order is reproduced below:
3 “In compliance to the order passed by the ITAT vide ITA No. 2903/Del/2006, dated 31.01.2007, the society/local authority is granted registration as per the provisions of section 12AA of the Income Tax Act, 1961 with effect from 31.03.2003 i.e. the date of filing of application. Entry of the application is made in the register maintained in this office for the purpose at SI No. 49/2006-07.” 2.2 The assessee was aggrieved with the date from which the registration was granted by the Commissioner of Income Tax, Ghaziabad. In view of the assessee, according to the proviso just below the section 12(1)(a) of the Act, the registration was to be granted from first day of the financial year in which the application was made. In the case of the assessee, the first day of the financial year would be 01.04.2002, whereas the registration was granted w.e.f. 31.03.2003 by the Commissioner of Income Tax. Aggrieved with the above discrepancy, the assessee filed petition under Section 154 of the Act before the Commissioner of Income Tax. Due to restructuring in the Department, the jurisdiction over exemption cases was assigned to the Commissioner of Income Tax (Exemption), Lucknow, who decided the application of the assessee and rejected with following remarks: “3. On the said dates of hearing, the Books of account, bills vouchers and no relevant material produced by the applicant society, due to non- availability of these the claim of the applicant society could not be verified. Moreover the Commissioner of Income Tax, Ghaziabad has passed the order u/s 12AA of the Income Tax Act, 1961 after taking into consideration of the Hon’ble ITAT direction and written submission of applicant. I do not find any mistake apparent from the record which can be rectified u/s 154 of the Income Tax Act, 1961, therefore the applications moved u/s 154 of the Income Tax Act, 1961 to be rejected.
Hence, the rectification applications dated 24.11.2014, 09.12.2014 & 21.01.2015 are hereby rejected.” 2.3 Aggrieved by the order of Commissioner of Income Tax (Exemption) the assessee is before us. 3. At the time of hearing, learned CIT(DR) raised question on the maintainability of the appeal. He submitted that any rectification order passed in respect of the order passed under Section 12AA of the Act is not included in the orders which are appealable to the Tribunal under section 253 of the Act. The relevant part of the section is reproduced as under: “253. (1) Any assessee aggrieved by any of the following orders may appeal to the Appellate Tribunal against such order— (a) …………….. (b) ………………. (ba) ……………. (c) an order passed by a [Principal Commissioner or] Commissioner under section 12AA or under clause (vi) of sub-section (5) of section 80G or under section 263 or under section 271 or under section 272A or an order passed by him under section 154 amending his order under section 263 or an order passed by a [Principal Chief Commissioner or] Chief Commissioner or a [Principal Director General or] Director General or a [Principal Director or] Director under section 272A;” 4. Learned CIT(DR) submitted that as the order under Section 154 of the Act in respect of section 12AA of the Act was not included in the list of orders which are appealable, the appeal filed against the said order is not maintainable.
On the other hand, the learned Authorized Representative submitted that the order under Section 12AA of the Act passed by the Principal Commissioner 5 or Commissioner is since appealable before the Tribunal, any rectification passed to that order is naturally eligible for appeal before the Tribunal.
We have heard the rival submissions and perused the material on record. It is undisputed that the order of rectification to the order passed under Section 12AA of the Act is not in the list of the orders appealable to the Tribunal. The legislature has included the order passed under Section 154 amending the order under Section 263 of the Act, however, the order rectifying order under Section 12AA of the Act has not been included. It is the settled position of law that there is no inherent right of appeal to any assessee and the right of appeal is only statutory one. Therefore, unless the statute specifically provides for filing an appeal against a particular order, no right of appeal can be said to be conferred upon an assessee. In this respect, we would like to note the observations of the Tribunal, Delhi Bench in the case of Pradeep Singh Vs. Deputy Commissioner of Income Tax, reported in (2005) 93 ITD 0514. The Tribunal in the above case relied on the decision of Hon’ble Gujarat High Court in the case of Mandal Ginning & Pressing Co. Ltd. Vs. Commissioner of Income Tax (1973) 90 ITR 332 (Guj.) and on the other High Court’s decisions, including the decision of Hon’ble Jurisdictional High Court in the case of Commissioner of Income Tax Vs. Mahabir Prasad & Sons, (1980) 125 ITR 165 (Del.). The relevant paras of the order in the case of Pradeep Singh (supra) are reproduced as under: “7. The above contention of the assessee was raised in the indentical situation before the Hon’ble Gujarat High Court in the case of Mandal
whether an appeal lies against an order of rectification made by the ITO under section 35(1) of the Indian Income Tax Act, 1922?
8. Section 35(1) of 1922 Act is analogous to Section 154 of 1961 Act. Under the 1922 Act, no appeal was provided under section 30 against the order of rectification under section 35(1). The contentions on behalf of assessee before the High Court was two folds as is apparent from page 335 of the report and the same is being reproduced for the benefit of this order:— "The assessee relied upon two clauses of sub-section (1) of section 30 in support of his contention that, when an assessment under section 23 is rectified by an order of rectification made under section 35, sub- section (1), the assessee is entitled to appeal against the order of rectification to the Appellate Assistant Commissioner. The first clause was any assessee objecting to the amount of income assessed under section 23... or the amount of tax determined under section 23... and the second clause was "any assessee denying his liability to be assessed under this Act". The main argument of the assessee was based on the former clause and reliance was placed on the latter clause only in the alternative."
The Hon’ble Gujarat High Court after considering various judgments rejected the said contentions of the assessee and held that no appeal lies against the order of Assessing Officer under section 35(1). Their Lordships observed at pages 335-336 as under:— "It is clear, on a plain reading of section 30, sub-section (1), that a right of appeal is given by that sub-section against various orders and each of the orders against which a right of appeal is conferred is described by reference to the source of the power under which it is made. The clause on which reliance has been placed on behalf of the assessee is in the same strain. It confers a right of appeal against the amount of income assessed or the amount of tax determined under section 23. It is obvious that the Legislature did not intend to confer a right of appeal against the amount of income assessed or the amount of tax determined without reference to the section under which the assessment or determination may have been made. If the legislature wanted to give a right of appeal against every assessment
7 of income or determination of tax, there is no reason why the legislature should have added the words "under section 23" and specifically enacted the source of the power under which the assessment of income or the determination of tax should have taken place in order that the assessee should be entitled to appeal against it. The words "under section 23" must, therefore, be given due effect in interpreting this clause. These words in the context in which they occur can mean "by virtue of" or "in exercise of the power conferred under section 23." If assessment of income or determination of tax has taken place under any other provision of the Act, it would not attract the right of appeal, unless of course it falls within any other clause of section 30, sub-section (1). Having said so much on the interpretation of the words used in the clause, we may now proceed to consider what is the nature of a proceeding for rectification and what happens when an order of rectification is made rectifying an assessment under section 23."
The perusal of the above judgment clearly shows that unless separate appeal is provided against the order of rectification, no appeal would lie against such order though such order rectifies the order of assessment.
This judgment clearly covers the issue before us. Similar view has been taken by the Hon’ble Madras High Court in the case of CIT v. Vellingiri Gounder & Bros. [1953] 24 ITR 166 and in the case of Vr. C. Rm. Adaikkappa Chettiar v. CIT [1970] 78 ITR 285 and also by Calcutta High Court in the case of CIT v. Rajnagar Tea Co. Ltd. [1973] 87 ITR 669 . This view is also fortified by the decision of Hon’ble Delhi High Court in the case of CIT v. Mahabir Prasad & Sons [1980] 125 ITR 1651 wherein it has been held that charging of interest is an integral process of assessment except where the ITO chooses to determine the liability for interest by an independent order and therefore, appeal would lie against the charging of interest if such appeal has been filed against the assessment order under section 143. However, it has been further held that no appeal would lie against separate order levying interest and nothing more. This legal finding is based on the principle that right of appeal is a creature of statute and there can be no right of appeal unless it is conferred by the statute. Since no right of appeal was conferred on the assessee against an independent order of the Assessing Officer charging interest, it was held that no appeal lies against such order.
In view of the above discussion, we are of the view that appeal is not maintainable against the order of the Assessing Officer under section 154
8 rectifying the original order under section 158BC directly to the Tribunal since no right of appeal has been conferred upon the assessee against such order under section 253(1) of the Act. The appeal would lie only before the CIT(A) under section 246A. The assessee may file an appeal before the CIT(A) with a request for condonation of delay if so advised.
In the result, the appeal of the assessee is dismissed as non- maintainable.”
In view of the above discussion, we are of the view that the appeal filed by the assessee against the order passed under Section 154 of the Act to the order under Section 12AA is not maintainable. However, the assessee may file an appeal against the order passed under Section 12AA of the Act by the Commissioner of Income Tax in compliance to the direction of the Tribunal with a request of condonation of delay, if so advised.
In the result, the appeal of the assessee is dismissed as not maintainable. The decision is pronounced in the open court on 16th December, 2015.