IT : Where revenue succeeded on merit on issue that was remanded, revenue's appeal against remand order would be infructuous
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[2013] 38 taxmann.com 186 (Karnataka)
HIGH COURT OF KARNATAKA
Commissioner of Income-tax, Central Circle
v.
Abdul Kareem Ladsab Telgi*
DILIP B. BHOSALE AND B. MANOHAR, JJ.
IT APPEAL NOS. 811 & 812 OF 2008
SEPTEMBER 4, 2013
Section 249, read with section 260A, of the Income-tax Act, 1961 - Commissioner (Appeals) - Form of [Deposit of tax] - Assessee's appeal was rejected by Commissioner (Appeals) on failure to pre-deposit tax required for filing appeal - Revenue sold a property for recovery of tax; hence, assessee sought to recall order of Commissioner (Appeals) - This application was rejected by Commissioner (Appeals) - Tribunal remanded matter to Commissioner (Appeals) against which revenue filed appeal before High Court - Pending this appeal, Commissioner (Appeals) decided remanded matter on merit in favour of revenue which was affirmed by Tribunal - Whether, in view of this fact, revenue's pending appeal had become infructuous - Held, yes [Paras 11 & 13] [In favour of assessee]
FACTS
| ■ | The assessment order was passed whereby the Assessing Officer determined the income of assessee at Rs. 4.09 crore. | |
| ■ | On appeal, the Commissioner (Appeals) rejected appeal on the ground that the assessee did not pay deposit the admitted tax as provided under section 249(4). | |
| ■ | Then, the assessee filed a writ petition which was also disposed off by holding that the assessee was bound to pay the admitted tax. | |
| ■ | Thereafter, the revenue auctioned one of the properties of the assessee and recovered Rs. 1.43 crore. | |
| ■ | Since the admitted tax was Rs. 23.01 lakh which was much less than the sales proceeds, the assessee filed an application for recalling order of the Commissioner (Appeals) but the same was rejected by him and, subsequently, on appeal, by the Tribunal. | |
| ■ | Against that order, the assessee filed Miscellaneous petition for recalling the above order which was allowed by the Tribunal and restored matter to the first appellate authority for deciding issue on merit. | |
| ■ | Against the order of the Tribunal, the revenue filed an appeal before the High Court. | |
| ■ | During pendency of the above appeal before the High Court, the first appellate authority disposed of the issue on merit by which the assessee's appeal was dismissed. The said order was confirmed by the Tribunal. | |
| ■ | The assessee filed an appeal before High Court against order passed by the first appellate authority and the Tribunal on merit. The High Court accepted the appeal. |
HELD
| ■ | From bare perusal of the sequence of events narrated above, it is clear that the order under challenge in these appeals have virtually rendered infructuous, in view of the order on merits passed by the appellate authority after remand and confirmed by the Tribunal. The orders passed by the 1st appellate authority and the Tribunal are challenged on merits, which is pending for final disposal by the High Court. [Para 11] | |
| ■ | It is in this backdrop, the answers to the questions formulated by this Court would be academic and not serve any useful purpose to the revenue. As a matter of fact, the revenue after remand has succeeded before both the authorities below i.e., the first appellate authority and the Tribunal and the orders passed therein are subject matter. [Para 12] | |
| ■ | Hence, there is reason to keep these appeals pending in further and therefore, there were to be held infructuous. [Para 13] |
K.V. Aravind for the Appellant. A. Shankar and M. Lava for the Respondent.
ORDER
Dilip B. Bhosale, J. - Heard learned counsel for the parties.
2. I.T.A. No. 812/2008 has already been admitted by this Court vide order dated 13.12.2010 on the following substantial questions of law:—
| "(1) | Whether the Tribunal was correct in holding that the order of the Appellate Commissioner should be setaside and the assessee should be given an opportunity to agitate the matter on merits by treating the auction sale proceeds as admitted tax liability without noticing the fact that the assessee was before the Tribunal against the rejection of a review petition by the Appellate Commissioner and consequently recording a perverse finding? | |
| (2) | Whether the Tribunal proceeded on the wrong assumption that the main order of the Appellate Commissioner dated 31.08.2004 was pending before them when the same had not been challenged by the assessee before the Tribunal which had already been confirmed by the Hon'ble High Court in Writ petition? | |
| (3) | Whether the Tribunal was correct in exercising jurisdiction u/s.254 (2) of the Act in holding that the revenue had funds from auction sale of assessee's property which can be treated as admitted tax when the same had already been adjusted towards other tax liabilities of the assessee in respect of other assessment years?" |
3. The questions of law, on which, I.T.A. No. 812/2008 was admitted and the questions of law in I.T.A. No. 811/2008 are similar. I.T.A. No. 811/2008 has not been admitted so far.
4. Learned counsel appearing for the respondent- assessee, at the outset, submitted that both the appeals, in view of the subsequent events, have rendered infructuous and they may be disposed of as such.
5. Though, the submission made by learned counsel for the respondent was not seriously disputed by the standing counsel for the appellants-revenue, he took us through the sequence of events, which, in our opinion, is necessary to be narrated in brief.
6. ITA No.812/08 is directed against the order dated 09.04.2008 passed by the Income Tax Appellate Tribunal, Bangalore Bench 'B' (for short "the Tribunal"), whereby, Misc. Petition No. 119(Bang)/2007 in ITA No.634(Bang)/2006 was allowed to the extent indicated in the said order. ITA No. 811/08 is directed against the order dated 11.04.2008 passed by the very same Tribunal in ITA No. 634(Bang)/2006, whereby, the appeal filed by the respondent-assessee was allowed for statistical purpose only.
7. ITA No. 812/08 is arising from the assessment order dated 25 03.2004, whereby, the Assessing Officer proceeded to determine income of the assessee as Rs. 4,09,87,500/-. The order of the Assessing Officer was carried in ITA No. 247/2004-05 before the 1st Appellate Authority. The 1st Appellate Authority rejected the appeal, solely on the ground that the assessee did not pay/deposit the admitted tax as provided for under Section 249(4) of the Income Tax, Act (for short 'the Act'). That order was further carried by the assessee in W.P.No.6862/2005 (T-IT). The writ petition was also disposed of vide order dated 17.06.2005 holding that the assessee was bound to pay the admitted tax as contemplated by Section 249(4) of the Act.
8. Thereafter, it appears, the Department auctioned one of the properties and recovered Rs. 1,43,00,000/-. Since the admitted tax as contemplated by Section 249(4) of the Act was Rs. 23,01,375/-, i.e., much less than the sale proceeds, the assessee filed an application for recalling the order dated 31.08.2004 passed by the 1st Appellate Authority in ITA No.247/2004-05. That application was rejected by the Appellate Authority vide order dated 06.03.2006. Against that order, the assessee preferred ITA No.634/Bang/2006 before the Tribunal. The Tribunal also dismissed the appeal vide order dated 18.1.2007 on the ground that the admitted tax was not paid by the assessee. Against that order, the assessee filed Misc. Petition No. 119/Bang/2007 in ITA No. 634/Bang/2006 before the Tribunal for recalling of the order dated 18.01.2007, whereby, ITA No. 634/Bang/2006 was rejected. The Misc. Petition (119/Bang/2007) was allowed by the Tribunal vide order dated 09.04.2008.
9. Against the order of the Tribunal dated 09.04.2008, ITA No.812/08 was filed by the Revenue in this Court and it was admitted on the aforementioned questions of law. When ITA No.812/08 was admitted, no interim order was passed by this Court, and in view thereof, ITA No. 634/Bang/2006, which came to be restored vide order dated 09.04.2008, was heard and disposed of by order dated 11.04.2008, whereby, the matter was remanded to the 1st Appellate Authority for deciding the appeal bearing ITA No.247/2004-05 on merits. The order remanding the matter by the Tribunal vide order dated 11.04.2008 is under challenge in ITA No. 811/08.
10. It is pertinent to note that after remand, though ITA No. 812/08 was pending for final hearing and ITA No. 811/08 was pending for admission, the 1st appellate Authority proceeded to hear the appeal bearing ITA No.247/2004-05 and disposed it of vide order dated 13.10.2008. By that order, appeal filed by the assessee came to be dismissed on merits. Against that order, assessee filed ITA 1474/Bang/2008 before the Tribunal. The Tribunal also dismissed the appeal filed by the assessee vide order dated 29.01 2010 on merits. The assessee carried the orders passed by the Tribunal and by the 1st appellate Authority in appeal before this Court bearing ITA No. 199/2010. This Court vide order dated 04.11.2010 admitted the said appeal on the questions of law raised in memorandum of the appeal.
11. From bare perusal of the sequence of events narrated above, it is clear that the order under challenge in these appeals have virtually rendered infructuous, in view of the order on merits passed by the Appellate Authority after remand and confirmed by the Tribunal in further appeal vide orders dated 13.10.2008 and 29.01.2010 respectively. The orders passed by the 1st Appellate Authority and the Tribunal are challenged on merits in ITA No. 199/2010, in this Court, which is pending for final disposal.
12. It is in this backdrop, when we perused the questions of law formulated by this Court vide order dated 13.12.2010, we find that the answers to those questions would be academic and not serve any useful purpose to the revenue. As a matter of fact, the revenue after remand has succeeded before both the Authorities below i.e., the 1st Appellate Authority and the Tribunal and the orders passed therein are subject matter in ITA No. 199/2010.
13. Hence, we do not find any reason to keep these appeals pending in further and we disposed them of as rendered infructuous. It is made clear that all contentions of the parties on merits are kept open to be raised and considered in ITA No. 199/2010 which is spending for final disposal
Regards
Prarthana Jalan
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