Income Tax Appellate Tribunal - Madras
V. Bhaskaran vs Assistant Commissioner Of Income Tax on 22 February, 2001
Equivalent citations: [2002]83ITD614(CHENNAI), (2003)79TTJ(CHENNAI)384
ORDER
A. Kalyanasundharam, Sr. Vice President
1. The assessee is an individual and has prayed for stay of demand of tax raised on him consequent to assessment framed under Chapter XIV-B of the IT Act, 1961 (hereinafter referred to as the Act). The prayer for stay of tax is of Rs. 56,698,100 has been moved by an application filed on 15th Feb., 2000, and is stated as based on an appeal filed on 9th Sept., 1998.
2. The prayer of the appellant for stay of tax is based on an order of the TRO-I, Central, Chennai, dt. 28th Aug., 2000, that stated for the foreclosure of fixed deposits for adjustment against dues recoverable from him. The appellant had also filed the order of rejection of stay by the Assessing Officer (AO for short) that is dt. 15th Jan., 1998.
3. The learned counsel for the appellant Mr. Sridhar had placed on our records the statement showing the events connected with the assessment proceedings and that followed it, According to this statement the admitted tax on the income-tax return was paid on 9th Sept., 1998, and the same day the appeal was preferred before the Tribunal. He had also indicated in the said statement that the appeal is belated by 283 days and had filed an application seeking to condone the delay in filing of the appeal.
4. Mr. Sridhar contended that Supreme Court in CIT v. Filmistan Ltd. (1961) 42 ITR 163 (SC) had considered the term 'no appeal shall lie' with reference to the content of the provisions of the IT Act, 1922, that stated that 'no appeal shall lie unless the tax has been paid'. He contended that the apex Court had held that till such time the requirement of payment of tax has not been complied with, the appeal filed would not be enforceable by the appellant and it would be enforceable on payment only and in that event, the appellate authority could only consider the prayer to condone the delay in filing of the appeal. He pleaded that the ratio laid down by the apex Court goes to indicate that an appeal filed without complying with the precondition of payment of tax is not a valid appeal. He contended that the appeal filed by the assessee would be effective only on payment of tax and once it becomes effective from the date of payment, all that the appellate authority is required to consider is that the appeal is filed belatedly and proceed to consider the application for condoning the delay. He accordingly maintained that the present appeal is in order in the light of the decision of the apex Court and that the delay of 283 days may be condoned.
He contended that the appellant was in confinement for eight months and all his property and other assets have been seized consequent to search at his premises. The appellant had filed his return of undisclosed income on estimate basis but did not have any liquid funds to meet the tax liability on the returned income. He made considerable effort to borrow money from various persons and finally deposited the same on 9th Sept., 1998, on which day the appeal was filed before, the Tribunal. He contended that the return through an estimate had been filed with the sole view of co-operating with the Revenue Department and considering the trauma that the assessee had to undergo, the Tribunal may be pleased to condone the delay in filing the appeal and admit it. He pleaded that admission of the appeal is the first step in proceeding with the stay application of the high demand raised on the assessee.
He submitted that the appellant had moved an appeal on an earlier occasion for the same block assessment years before the Tribunal but it was rejected as not maintainable because the precondition of payment of tax on admitted income was not met. He contended that because the appeal was held as invalid on the preliminary ground itself and not on any other ground, he pleaded that the Tribunal could entertain the present appeal and the stay application.
He placed before us all that transpired with the assessee. He contended that the search was made on the assessee and unimaginable additions were proposed. The assessee was placed under confinement for over eight months and later released. The assessee with the view to extend maximum cooperation to the Department had tried to gather materials and information for filing of the return of income but was unable to do and hence chose to file a return that was purely an estimate. The Department did not act upon this return of income and fantastic assessment was made.
Mr. Sridhar submitted that the appellant had filed the appeal against the same block period assessment and had filed an application for stay of demand of tax as well. The Tribunal had granted interim stay and heard the appeal as well. He further pointed out that argument of the assessee that the provisions of Section 249(4) of the Act applied to in regard to an appeal that lie before either the Dy. CIT(A) or CIT(A) did not find favour with the Tribunal. He pleaded that the Tribunal was placed with fact that though, Department had insisted that the assessee must pay tax based on the returned income but had not acted upon the return and that, therefore, the argument of the Department appeal should only be admitted by the Tribunal on payment of admitted tax. In order on the appeal, the Tribunal had conceded to the argument of the Departmental Representative on the applicability of the provisions contained in Section 249(4) of the Act that the appeal could be admitted by the Tribunal only on payment of admitted tax on the return of income filed by the assessee. The order of the Tribunal is dt. 7th Aug., 1998.
Mr. Sridhar submitted that one course that could be followed by the Tribunal is to hear the argument of the assessee on the miscellaneous petition moved against the earlier order of the Tribunal and then proceed with the hearing of the present stay application. He submitted that the grounds that had been raised in the miscellaneous petition hint at glaring mistakes in the order and that he would be able to satisfy this Bench that the rectification of the earlier order is unavoidable and that the correction of the patent mistakes would require recall of the entire order for a fresh hearing.
Considering that the miscellaneous application, its possible impact on the present proceedings, we permitted Mr. Sridhar to place his arguments on the miscellaneous application as well and this was accordingly made part of the present proceedings. Mr. Sridhar was cautioned that the power of the Tribunal as contained in Section 254(2) of the Act permits it to carry out correction of any mistake that is apparent from the record and that power of review of the order is not included. Mr. Sridhar assured the Bench that he is conscious of the same and his effort would be only to show glaring mistakes in the order. He accordingly carried us through the miscellaneous petition the contents of which are reproduced below :
1. The petitioner firmly believes that the order passed by Your Honours in dismissing the original appeal filed was not based on the full set of fact and law of the case as it existed at the time of passing of the order.
2. Your Honours had dismissed the appeal filed by the petitioner on the ground that the tax on undisclosed income returned was not paid and the provisions of Section 249(4) would render the appeal before Your Honours as defective and cannot be admitted. The Ahmedabad Bench of the Honourable Tribunal has, in the case of Shri Nalin Doshi v. Asstt. CIT in ITA No. 4605/Ahd/1996, decided by its order dt. 7th May, 1997, almost 15 months to the date prior to the order in the instant case held that the provisions of Section 249{4) are inapplicable to the appeals before the Tribunal and have effect only in cases before the CIT(A) or the Dy. CIT(A). This decision and its impact were not considered before the order dismissing the appeal filed by the petitioner as not maintainable,
3. The order of Your Honours does not also consider the issue as to whether the return filed by the petitioner was a valid return of undisclosed income and the learned AO has taken cognizance of the return or not. If the learned AO had not taken cognizance of the return filed by the petitioner, then there is no case for the payment of taxes on the returned income.
4. A notice under Section 158BC is claimed to have been served on the petitioner when he was imprisoned directing to file the return of undisclosed income and the time for filing of this return lapsed when the petitioner was in prison. After 8 months of imprisonment, when the petitioner was left at large, he had to respond to notices of so many authorities and also had an onerous task of putting together his life and did not have the time and the necessary details for computing undisclosed income, if any. Hence, the petitioner arrived at a possible figure of undisclosed income based on whatever he had in possession and by recollection and filed a return without giving year-wise break-up and details of the undisclosed income. The learned AO has stated in his order that the return was extremely belated and it is not in accordance with law, as the return did not disclose the year-wise, income and other particulars. Hence, according to the learned AO, it is fairly clear that the return filed is not a legally valid return. This point has not been considered by Your Honours in the order dismissing the original appeal filed by the petitioner. If the return of undisclosed income is considered as not legally valid, then the question of the appeal being dismissed for non-payment of taxes on income returned does not arise.
5. The non consideration of the essence of the judgment referred above and the basic question about the validity of the return of income and the consequent dismissal of the appeal would cause grave miscarriage of justice and would cause grievous injury to the petitioner.
6. For these and such other grounds as may be raised either before or during the course of hearing before Your Honours.
He contended that the Tribunal should have considered the decision of the other Bench and if it had any reservation to the said decision, the only course open was to make a reference to a Special Bench. He pleaded that not referring to a decision and not following the prescribed rule of precedence the order of the Tribunal suffers and this is a mistake that is apparent from the record. He contended that the other decision had held that the provisions of Section 249(4) was attracted only on an appeal that is filed before the Deputy or the CIT(A) who are the first appellate authority and by no means the Tribunal could be equated with them. He submitted merely because the statute had provided for the first appeal on block assessments it does not make the Tribunal the first appellate authority.
He further contended that the return if acted upon by the learned AO would have some legitimate value as a valid return and when the AO states that the return is not in accordance with law, against filing of such a return the Department could not have insisted upon for the payment of tax on the income so returned. He pleaded that the return must be a valid one is a precondition for the payment of tax. He pleaded that the Tribunal had not gone to this aspect at all and thus the order suffered from infirmity. He insisted that the submissions as made by him and the contents of the miscellaneous petition sufficiently point out the glaring mistakes in the order of the Tribunal compelling it to recall its earlier order. He submitted that the Tribunal after having recalled its order should examine the merits of the present petition along with the merits in the earlier appeal and this he submitted is the proper process of law.
5. Mr. Suryanarayana, the learned Departmental Representative referred to the decision of Madras High Court in Seshasayee Paper & Boards Ltd. v. IAC (1986) 157 ITR 342 (Mad) and submitted that an order of an appellate authority must be held as final unless by due process of law the said decision has been held otherwise by a superior Court. He submitted that the order of the Tribunal dt. 7th Aug., 1998, in the case of the appellant has become final as far as the Tribunal is concerned. He pleaded that the present stay petition that is stated as based on an appeal filed on 9th Sept., 1998, is in fact a supplementary appeal for the block assessment framed on the same assessee for the same years. He referred to the decision of the Bombay High Court in International General Electric Co. (India) Ltd. v. CIT (1993) 202 ITR 960 (Bom) and submitted that the Court had ruled that for the same assessment year once an appeal had been disposed of another set of appeal would not lie before the same appellate authority.
He submitted that the Tribunal in Dior International (P) Ltd. v. Asstt. CIT (1993) 46 ITD 321 (Del) has held that the precondition of payment of tax is applicable if an appeal is to be admitted by the Tribunal. He made reliance on the decision of the apex Court in Vijay Prakash D. Mehta v. Collector of Customs (1989) 175 ITR 540 (SC) and submitted that the Court had clearly held that the lawmaker who provides a right of appeal under a statute could also lay down a condition for it being admitted and non-fulfilling of the condition by the assessee would not vest on him the right of appeal. He submitted that the right of appeal provided under a particular provision in a statute that prescribes the time-limit for filing of appeal and the appeal that is filed late under that provision that did not provide for condoning the delay in filing of the appeal, the appellate authority could not consider the appeal under the general provisions for gathering the power to condone the delay. He submitted that this is the ruling of the Delhi High Court in Deen Dayal Goyal v. ITAT (1986) 158 ITR 391 (Del), the Madras High Court in Smt. R.V. Sarojini Devi v. IAC (1999) 152-CTR (Mad) 32 : (2000) 242 TTR 329 (Mad) and the apex Court in CIT v. Data Software Research Co. Ltd. (2000) 113 -Taxman 30 (SC).
He made reference to the miscellaneous petition as filed by the assessee against the earlier order of the Tribunal dt. 7th Aug., 1998, and drew our attention to para 7 of that order. He submitted that the Tribunal in its wisdom had extended the offer to the appellant to pay the tax by allowing it sometime but the appellant had declined which, disinclination has been treated by the Tribunal as refusal by the appellant. He submitted that the assessee after refusing the offer of the Tribunal has, after a month of the said order, made payment of the tax and is seeking admission of a fresh appeal. He pleaded that the appellant, who has refused to pay the tax when the Court offered it but chooses to pay when it feels like, should not be treated lightly.
He contended that the miscellaneous petition contains only arguments and is a petition for review. He pleaded on any count the present stay petition and the appeal are not maintainable and that the miscellaneous petition too deserves only to be dismissed.
Mr. Ravi, the learned Senior Departmental Representative, supplemented the argument of Mr. Suryanarayana and contended that the Act does not permit filing of a second appeal for the same set of years before any authority. He strongly supported the arguments advanced by Mr. Suryanarayana that the present appeal and the stay petition are supplementary appeal and that the Tribunal should not entertain such supplementary appeals. He finally pleaded that the Act does not empower any appellate authority to entertain supplementary appeal and, therefore, the petition for stay, the appeal on which it is stated as arising and the miscellaneous application all deserve only to be dismissed.
6. The rival contentions have been given our very careful consideration. We would first deal with the miscellaneous petition on the order dt. 7th Aug., 1998. The first contention is that one other decision of the Tribunal passed before 15 months from the date of the order in question was not considered. It is not the contention of the appellant that the said decision was referred during the argument and was omitted to be considered. At best it could be said the order of the Tribunal in the instant case is per incuriam but that does not give rise to mistake from the record.
The second contention that the return found to be not a return in law and hence, the Department could not insist for the payment of tax on such a return, to our mind is a baseless argument. The Act requires that an assessee who files a return must pay the tax that is due on such a return. The correctness or otherwise of a return is a separate process that follows the filing of the return of income and that is to be initiated by AO on which the assessee has a say when so called upon. Therefore, the payment of tax being a step prior to examination of the return if not fulfilled by the person filing the return, he could not throw up his responsibility by the observation of the AO that the return is not valid in law. Therefore, this argument being a frivolous one, we reject the same.
The Tribunal had in its order dt. 7th Aug., 1998, in para 7 had observed as under:
"On enquiry from us, the assessee's counsel Shri Ravi submitted that the assessee had no funds or means to raise funds at the time of the filing of the return of the undisclosed income of the block period in statutory Form No. 2B as the assessee was in jail till May, 1997, from 29th Dec., 1996, under the alleged offences and violation committed as per the Conservation of Foreign Exchange and prevention of Smuggling Activities Act. It is for this reason, Shri Ravi submitted that there was failure in making payment of the admitted tax on the returned undisclosed income and since this constituted reasonable cause this Tribunal may take cognizance of this fact and admit the appeal assuming that the provisions of Section 249(4) are also applicable to appeals before this Tribunal. On a specific query from us, Shri Ravi submitted that even as on date, the assessee has no liquid funds to pay the admitted tax on the returned undisclosed income, if time is given by us to pay the same. There has been a clear emphatic 'No' for payment of the admitted tax on returned income from, the assessee's side even to our suggestion for maintainability and admission of appeal under Section 253(1)(b) of the Act assuming for a while that the provisions of Section 249(4) do not get attracted in relation to appeal before this Tribunal"
From the perusal of the above it is clear that Tribunal had asked the assessee whether it would deposit the tax due on its return if it is allowed time to which the assessee has replied that it does not have the finances to deposit the tax and this was noted by the Tribunal as refusal to its proposal or offer and concluded that the non-payment of the tax due on a return of income filed by the assessee would not give the right of appeal to him. This is an opinion that is expressed by the Tribunal after affording the assessee an opportunity to make good the default. The expression of opinion may not be in line with the opinion expressed by one other Bench but all the same it still remains an opinion. The expression of opinion of a Bench is not open for review by another Bench and the only course open is to make a reference to a Larger Bench. No Bench in the guise of rectifying a mistake that is apparent from the record could review any order because, the Act does not permit or provide for a review or revision of an order of the Tribunal. The Act under Section 263 permits revision of an order of AO by his superior the GIT and had also placed certain conditions fulfilment of which alone that the CIT gets the power under the Act to revise the order of AO.
The Act has prescribed the right of appeal "to an aggrieved appellant. The lawmaker in their wisdom had provided for the course of appeal to the first appellate authority against an order of assessment, reassessment, rectification, imposition of fine, penalty, levy of interest and so on. The lawmaker further had bifurcated such appeals arising from an order of assessment into two categories, one, that would lie before the Dy. CIT(A) and two, the CIT(A). These are contained in Section 246 of the Act. The form of appeal and the limitation related thereto are specified in Section 249 of the Act.
The lawmaker has provided for an appeal to the Tribunal and this is contained in Section 253 of the Act. The lawmaker has also defined the categories of orders against which appeal shall lie to the Tribunal. Both the assessee and the Department have the right of appeal to the Tribunal against the order of the first appellate authority. However, in regard to certain sections like the appeal against the order of revision by the CIT is a right granted to the assessee only. Similarly, it is only the assessee who has been given the right of appeal against the assessment framed for the undisclosed income for a block period of years. The section also permits the respondent to an appeal to file cross-objections to an appeal filed by the applicant and has allowed a time limit of thirty days. For the sake of facility the said section is brought hereunder,
253. Appeals to the Appellate Tribunal--(1) Any assessee aggrieved by any of the following orders may appeal to the Tribunal against such order-
(a) an order passed by a Dy. CIT(A) before the 1st day of Oct., 1998, or, as the case may be, a CIT(A) under Section 154, Section 250, Section 271, Section 271A or Section 272A; or
(b) an order passed by an AO under Clause (c) of Section 158BC, in respect of search initiated under Section 132 or books of account, other documents or any assets requisitioned under Section 132A, after the 30th day of June, 1995, but before the 1st day of Jan., 1997; or
(c) an order passed by a CIT under Section 263 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 Chief CIT or a Director-General or a Director under Section 272A.
(2) The CIT may, if he objects to any order passed by a Dy. CIT(A) before the 1st day of Oct., 1998, or, as the case may be, a CIT(A) under Section 154 or Section 250, direct the AO to appeal to the Tribunal against the order.
(3) Every appeal under Sub-section (1) or Sub-section (2) shall be filed within sixty days of the date on which the order sought to be appealed against is communicated to the assessee or to the CIT, as the case may be ;
Provided that in respect of any appeal under Clause (b) of Sub-section (1), this subsection shall have effect as if for the words "sixty days", the words "thirty days" had been substituted.
(4) The AO or the assessee, as the case may be, on receipt of notice that an appeal against the order of the Dy. CIT(A) or, as the case may be, the CIT(A) has been preferred under Sub-section (1) or Sub-section (2) by the other party, may, notwithstanding that he may not have appealed against such order or any part thereof, within thirty days of the receipt of the notice, file a memorandum of cross-objections, verified in the prescribed manner, against any part of the order of the Dy. CIT(A) or, as the case may be, the CIT(A) and such memorandum shall be disposed of by the Tribunal as if it were an appeal presented within the time specified in Sub-section (3).
(5) The Tribunal may admit an appeal or permit the filing of a memorandum of cross-objections after the expiry of the relevant period referred to in Sub-section (3) or Sub-section (4), if it is satisfied that there was sufficient cause for not presenting it within that period, (6) An appeal to the Tribunal shall be in the prescribed form and shall be verified in the prescribed manner and shall, in the case of an appeal made, on or after the 1st day of Oct., 1998, irrespective of the date of initiation of the assessment proceedings relating thereto, be accompanied by a fee of,--
(a)....................... :
Provided that no such fee shall be payable in the case of an appeal referred to in Sub-section (2) or a memorandum of cross-objections referred to in Sub-section (4).
(7) An application for stay of demand shall be accompanied by a fee of five hundred rupees."
Primarily speaking the Tribunal gets its power to hear an appeal that falls into one of the defined categories and any appeal that does not fall into any of the defined category, Tribunal could not adjudicate on it except holding that the appeal is outside the scope of the Tribunal. Tribunal in Section 254(1) of the Act is vested with the power to pronounce an order on the subject-matter of appeal that arises from the orders of the authority whose order is in challenge before it. In other words, Tribunal could not decide an issue though raised before it if it does not arise out of the order of the authority whose order is challenged before it in appeal. Courts have examined the powers of the Tribunal on several occasions and have held that a question of law though raised for the first time before it could be entertained provided the facts concerning the said question does not call for any inquiry. Even questions of law that are related to the issue in appeal that go to the root of the matter like the very jurisdiction of assessability to tax, could be entertained.
The lawmaker considered that the Tribunal is the final fact-finding authority in the hierarchy of appeals and there could be mistakes committed in appreciation of facts. In order to give finality to the correctness of facts appreciated by the Tribunal, it provided for rectification of its order in cases where the mistakes are apparent from the record and this is available in Section 254(2) of the Act.
Section 254 further provides that only in cases where Section 256 of the Act has (sic-not) been moved by either of the parties, the order of the Tribunal shall be final. This suggests that the Tribunal can no longer deal with the case once it pronounces its order and moreso when no further proceedings like calling for a reference to the High Court on a question of law or a direct reference to the Supreme Court. Tribunal had been held as seized of the appeal only when the reference against its order is pending because as and when the High Court or the Supreme Court gives its decision Tribunal is required to give effect to such orders under Section 260 of the Act on its order. The Sections 254 and 256 of the Act are reproduced below for facility.
254. Orders of Appellate Tribunal.--(1) The Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit.
(2) The Appellate Tribunal may, at any time within four years from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under Sub-section (1), and shall make such amendment if the mistake is brought to its notice by the assessee or the AO :
Provided that an amendment which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee, shall not be made under this sub-section unless the Tribunal has given notice to the assessee of its intention to do so and has allowed the assessee a reasonable opportunity of being heard :
Provided further that any application filed by the assessee in this sub-section on or after the 1st day of Oct., 1998, shall be accompanied by a fee of fifty rupees.
(3). The Appellate Tribunal shall send a copy of any orders passed under this section to the assessee and to the CIT.
(4) Save as provided in Section 256, orders passed by the Tribunal on appeal shall be final.
256. Statement of case to the High Court.--(1) The assessee or the CIT may, within sixty days of the date upon which he is served with notice of an order passed before the 1st day of Oct., 1998, under Section 254, by application in the prescribed form, accompanied where the application is made by the assessee by a fee of two hundred rupees require the Appellate Tribunal to refer to the High Court any question of law arising out of such order and, subject to the other provisions contained in this section, the Appellate Tribunal shall, within one hundred and twenty days of the receipt of such application, draw up a statement of the case and refer it to the High Court:
Provided that the Appellate Tribunal may, if it is satisfied that the applicant was prevented by sufficient cause from presenting the application within the period hereinbefore specified, allow it to be presented within a further period not exceeding thirty days.
(2) If, on an application made under Sub-section (1), the Appellate Tribunal refuses to state the case on the ground that no question of law arises, the assessee or the CIT, as the case may be, may, within six months from the date on which he is served with notice of such refusal, apply to the High Court, and the High Court may, if it is not satisfied with the correctness of the decision of the Appellate Tribunal, require the Appellate Tribunal to state the case and to refer it, and on receipt of any such requisition, the Appellate Tribunal shall state the case and refer it accordingly.
(3) Where in the exercise of its powers under Sub-section (2), the Appellate Tribunal refuses to state a case which it has been required by the assessee to state, the assessee may, within thirty days from the date on which he receives notice of such refusal, withdraw his application, and, if he does so, the fee paid shall be refunded.
There used to be Section 245M of the Act that permitted an appeal filed before the Tribunal to be allowed to be withdrawn in order to enable the assessee to approach the Settlement Commission. This was so thought of by the lawmaker for avoiding of parallel proceedings. Section 245M also provided that in the event the application moved before the Settlement Commission fails, the appeal that was allowed to be withdrawn by the Tribunal would be treated as never withdrawn. For the sake of facility the said section is brought down.
245M. Certain persons who have filed appeals to the Appellate Tribunal entitled to make applications to the Settlement Commission.--(1) Notwithstanding anything contained in this Chapter, any assessee who has filed an appeal to the Appellate Tribunal under this Act which is pending before it shall, on withdrawing such appeal from the Appellate Tribunal, before the 1st day of Oct., 1984, be entitled to make an application to the Settlement Commission to have his case settled under this Chapter:
Provided that no such assessee shall be entitled to make an application in a case where the ITO has preferred an appeal under Sub-section (2) of Section 253 against the order to which the assessee's appeal relates.
(2) Any assessee referred to in Sub-section (1) may make an application to the Appellate Tribunal for permission to withdraw the appeal.
(3) On receipt of an application under Sub-section (2), the Appellate Tribunal shall grant permission to withdraw the appeal.
(4) Upon the withdrawal of the appeal, the proceeding in appeal immediately before such withdrawal shall, for the purposes of this Chapter, be deemed to be a proceeding pending before an IT authority.
(5) An application to the Settlement Commission under this section shall be made within a period of thirty days from the date on which the order of the Appellate Tribunal permitting the withdrawal of the appeal is communicated to the assessee.
(6) An application made to the Settlement Commission under this section shall be deemed to be an application made under Sub-section (1) of Section 245C and the provisions of this Chapter except Sub-section (7) of Section 245D shall apply accordingly.
(7) Where an application made to the Settlement Commission under this section is not entertained by the Settlement Commission, then, the assesses shall not be deemed to have withdrawn the appeal from the Appellate Tribunal and the provisions contained in Section 253, Section 254 and Section 255 shall, so far as may be, apply accordingly.
The perusal of the various provisions concerning appeal to the Tribunal, powers of the Tribunal, etc., go to show that the Tribunal would acquire the jurisdiction to hear and pass its order only if the appeal falls in any one or more of the categories indicated in the section. There are circumstances that permit filing of an appeal for the same assessment year more than once. These circumstances are, (1) appeal arising out of appellate order based on an assessment order; (2) appeal against the order of the CIT revising the order of assessment under Section 263 of the Act; (3) appeal consequent to the giving effect to the order of the CIT; (4) appeal against the assessment framed consequent to the assessment being set aside; (5) reassessment consequent to reopening of assessment; (6) appeal against rectification of assessment, reassessment, revision, rectification of appellate order; and (7) appeal against an order of registration of a firm and so on. The appeals as listed above are considered independent proceedings and do not overlap one another.
The issue in the present stay application and the appeal is quite different from the one described in the earlier paragraph. In civil proceedings a cause of action triggers an appeal and once that appeal is disposed of, the next course of action is namely, appeal to High Court or Special Leave to the Supreme Court. For the same cause of action the Court may not be empowered to hear the appeal or application because, on that very cause of action, the Court has pronounced its decision and its decision operates on principles of res judicata. We had touched upon the specific provision of Section 254(4) of the Act that had provided that the order of the Tribunal as given in Section 254(1) of the Act shall be final except as provided for in Section 256 of the Act. This clearly lays down that once Tribunal pronounces its order, the parties before it have the option of accepting it or calling for rectification of any mistake that is apparent from the record or calling for a reference to the High Court or a direct reference to the Supreme Court.
The Tribunal in the case of the assessee vide its order dt. 7th Aug., 1998, had pronounced that the appeal before it was not maintainable because the assessee had not paid the tax that is due on its returned income. The assessee vide his application dt. 15th Feb., 2000, had filed its application for rectification of the order dt. 7th Aug., 1998. This application had been dealt with in the earlier paragraph and the finding is that the order does not contain any mistake and the application was found as without any merit. This means that the order of the Tribunal dt. 7th Aug., 1998, stands and is final. The assessee had not preferred any application calling for a reference on a point of law to the High Court which is implied admission that he has no intention to agitate any further.
By means of the application dt. 9th Sept., 1998, the assessee has prayed for admission of the present appeal claiming that it had paid the tax due on the returned income and as a different circumstance from the one considered by the Tribunal in its order dt. 7th Aug., 1998. The Tribunal in its order dt. 7th Aug., 1998, had mentioned that it had extended an opportunity for payment of tax which the assessee could not utilise by stating that its finances did not permit such a payment, The assessee having failed to seize the opportunity offered by the Tribunal, subsequently finding that the decision of the Tribunal had gone against it on the ground of non-payment of tax desires revival of its appeal by paying the tax subsequent to the order of the Tribunal.
The decision of the apex Court in Filmistan Ltd (supra) relied upon by the counsel had held that the appeal must be treated as belated and the delay must be considered with reference to filing of the appeal only. This decision could have been invoked by the assessee in the earlier proceeding before the Tribunal or before the High Court, which, might applying the said ratio of the apex Court could have directed the Tribunal to proceed with the hearing of the appeal subject to its satisfaction that the delay in filing of the appeal is on account of a reasonable cause. The said decision could perhaps be relied upon if the appeal is pending and had not been disposed of.
The Tribunal on a point having given its decision, the parties only should resort to the legal process because the earlier decision for the same assessee, same set of facts and year, etc., would be staring on the face of the Tribunal and that acts as res judicata. Though, Courts have held in a number of cases that the principle of res judicata is not applicable to income-tax proceedings and this has been so stated on the reasoning that each assessment year is different and independent, but the general principle of res judicata applies to the appellate Court.
This is precisely what the Bombay High Court (supra) had come to hold that the appellate authority having disposed of an appeal for an assessment year, another appeal before him does not lay on a different point. This can be extended to mean that an appeal that is dismissed for a default could not be reinstated subsequently on the ground that the default had been corrected. The subsequent correction of the default perhaps may impress the superior Courts like the High Court or the Supreme Court for giving a direction to consider the delay in filing of the appeal but, one Bench of the Tribunal does not stand as a superior Court to the Bench that decided the matter earlier and, therefore, does not get the power under the Act. When the Tribunal is not having the power to consider the appeal, for the reasons mentioned above, it has only to conclude that the appeal is not maintainable before it and dismiss it. We accordingly dismiss both the stay application and the appeal filed by the assessee. The miscellaneous petition moved against the order of the Tribunal dt. 7th Aug., 1998, is also dismissed.