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Income Tax Appellate Tribunal, MUMBAI BENCH “H”,
Before: SHRI B.R.BASKARAN & SHRI PAWAN SINGH
O R D E R PER PAWAN SINGH, JM:
1. 1. All these appeals filed by the Assessee are directed against the separate but identical order by the Commissioner of Income Tax (Appeals)-35, Mumbai (‘CIT(A)’ for short) dated 30/11/2012 in respect of assessment years 1992-93 to 1995-96, As the issue arising in all the appeals are identical, for the sake of convenience, these appeals are clubbed together and are being disposed of by the common order.
2. The sole issue that arise in all these appeals is whether on the fact and circumstances of the case(s), the CIT(A) was justified in dismissing the appealsof the assessee on the grounds that the assessee has not paid taxes as per the income, by invoking the provision of sec 249(4)(a) of the Act.
The brief facts of the case(s) are that the residential property of the assessee was searched u/s 132 of the Act, on 24/11/1994. The assessee was served with a notice u/s 148, and in response of the notice the assessee filed return of income in respect of AY’s 1992-93 to 1995-96, however the AO processed the return of income and computed the income in different AY’s under section 143(3) of the Act, and assessed the income of the assessee by making addition(s) and initiated penalty proceeding U/S 27(1)( c) of the Act in its order(s).
The order(s) of the AO was assailed before the first appellate authority / CIT(A), the CIT(A) vide order dated 29/11/1999, decline to admit the appeals(s) on the ground that the assesses had not paid/ deposited the tax due. Aggrieved by the order of the CIT(A) date 24/11/1999. The assesse preferred an appeal before ITAT, Mumbai, and this Tribunal Vide order dated 10/02/2005 restored back the matter to the file of CIT(A) with specific direction. However the CIT(A) while considering the directions of the ITAT observed as under ------ “ I have also respectfully following the directions of the Hon'ble ITAT carefully considered the issue of immovable property seized. It is also learnt that other governmental agencies have also laid claim to the said properties and In fact the property at Atlanta stands sold against dues of the government departments other than Income-tax. Recourse to the judicial pronouncement shows that the Assessing Officer could only be treated as having custody of the assets for the limited purpose of recovery. The Hon'ble Courts have pronounced that the state has the prerogative of confiscation under any other law also. The appellant cannot force the I.T.Authorities to appropriate the same for tax and thereby avoid confiscation (P.P.Kannlah vs. ITO (1981) 129 ITR 414 (Mad.), Collector of Central Excise vs. R.Seshammal & Anr. (1983) 144 ITR 509 (Mad.) S. Harindersingh vs. ITO (1987) 63 CTR (All) 36. In this case the Authorised Representative of the appellant during the proceedings stated as per the understanding that many of the above immovable properties stand sold on account of state dues by SAFE/NDPS.
From the earlier order of CIT(A)-XXII, Mumbai, it is seen that in fact the Assessing Officer has tried to ascertain the status of property after receiving request letter by the appellant to sell them. It was also found that the Addl.DIT had addressed a letter to SAFEMA/NDPS Informing them about the seizure effected and tax appropriated. Further, as the LT. Act provides that only the benefit of cash, FOR's, jewellery and other assets seized by the Income-tax Department alone can be given to the appellant against the tax dues u/s.132B of the I.T.Act. A plain reading of the section clearly indicates that determinate and clarity of Right in title assets can be considered. Section 132B of the IT. Act states that If during the search money had been seized and retained such money can be applied for the discharge of liability. On the other hand if the money seized was not sufficient for the purpose of discharge of tax liability the assets other than the money which had been retained by the A.O. would be deemed to be under distraint as if such distraint was effected by the ITO u/s.226(5) of the I.T.Act. The asset would mean money, bullion, jewellery or other valuable article or thing as expressly stated in Section 132 of the I.T.Act. In this case as the Immovable property is not without doubt and handicap they would not be covered u/s.132B of the I.T.Act.
From the above discussion it is clear that the appellant's case is still covered u/s 249(4)(a) of the I.T. Act.
We have heard the Ld. AR of the assessee and the Ld. DR for the revenue and gone through the material available on the record.
Ld. DR argued that the order passed by the CIT(A) is not appealable before ITAT and the assessee would have approached the Hon’ble Jurisdictional High Court under the writ jurisdiction and further relied upon the judgement reported viz (2002) 82 ITD 512(MUM) titled as Bharatkumar Sekhsaria Vs DCIT and 319 ITR 154( Bombay) titled as CIT Vs. Grasim Industries Ltd. In Bharatkumar Sekhsaria Vs DCIT the Hon’ble Jurisdictional High Court has held that no tax was paid with return of income but it was indicated that amount seized during search was to be considered as amount paid on account of tax –Assessing officer observed that the amount disclosed was much less than actual disclosed income therefore he made addition –on appeal the Commissioner (Appeal) dismissed Assessee appeal as full amount of the tax due was not paid before filing of the appeal. The other case cited /relied by Ld. DR is CIT Vs. Grasim Industries Ltd, in Grasim Industries the Hon’ble High Court dealt with the issue of condonation of delay in filing the appeal which is not at all issue before us in the present matter(s).
On the other hand he Ld. AR of the assessee have relied upon the Judgement of coordinate bench of Mumbai Tribunal in Mum/ 2000, titled as Devine Holdings Pvt. Ltd. Vs. DCIT wherein it was held that the order passed by the CIT(A) is final for dismissing the appeal in limine is substantive order and not the interim order and therefore the Assessee appeal to the Income Tax Appellate Tribunal is competent. And it was further held that if there was delay by the revenue in adjusting the seized amount as ‘tax paid’ by the assessee, the assessee cannot be blamed for such delay. However in the present case the entire assets of the assessee has been seized and the assessee himself requested to adjust the amount of the tax against his seized assets as he is unable to pay anything against liability. The Coordinate bench ITAT Delhi in ITA No. 6539/1993, titled as Gopal Chand Khandelwal Vs ACIT, wherein it was observed that the assessee was one of the notified person under the Special Court ( TORTS) Act 1992. The assessee was not able to deal with his property as all the property of the assessee was attaché with the Special Court and the assessee did whatever was possible for him on his part to comply with the provision. In the present case(s) the assessee is having the same condition who is writing to the revenue to adjust the amount of his liability and his seized assets. The case law cited by the Ld AR of the Assessee squarely cover the issue before us thus we hold that the dismissal of the appeal by the first appellate authority was not legally justified and the same is set-aside.
In view of the above, we hold that CIT(A) was not justified in holding that appeal(s) before him cannot be admitted.
In the result, appeal(s) filed by the assessee are allowed and the CIT(A) is directed to hear and dispose of the appeal(s) of the assessee on merits. The other ground raised in the present appeal does not require any further consideration as the appeal(s) are stand remanded to the file of CIT(A).
In the result, the assessee’s appeal(s) are allowed for statistical purposes.
Order pronounced in the open court on 14 /10/ 2015