S. 147/ 150(1): A "finding" is one that is necessary for the disposal of an appeal in respect of an assessment of a particular year
The issue for our examination is whether there is any finding in the order of the Tribunal which is being given effect to and/or as consequence thereof, the impugned notice has been issued. It is only when the answer to the above question is in the affirmative i.e. there is a finding that the issue of impugned notice would be saved from the bar of limitation by virtue of Section 150(1) of the Act:
(i) The issue of what is a 'finding' in an adjudicatory/ appellate order is no longer res integra. The Supreme Court while dealing with a provision similar to Section 150 of the Act found in Section 34(3) of the Income Tax Act, 1922 in ITO v/s. Murlidar B. Deo 52 ITR 335 has explained the meaning of 'finding' thus:
" …. …. ….. A 'finding', therefore, can be only that which is necessary for the disposal of an appeal in respect of an assessment of a particular year. The Appellate Assistant Commissioner may hold, on the evidence, that the income shown by the assessee is not the income for the relevant year and thereby exclude that income from the assessment of the year appeal. The finding in that context is that that income does not belong to the relevant year. He may incidentally find that the income belongs to another year, but that is not a finding necessary for the disposal of an appeal in respect of the year of assessment in question."
(ii) In view of the above and particularly the law laid down by the Apex Court in Murlidhar Bhagwan Das (supra), it is very clear that the Tribunal in its order dated 25th October 2002 was concerned with an appeal from orders passed in block Assessment and held that the ambit/ scope for assessment for the block period under Chapter XIVB is only to assess the undisclosed income for the block period and not for the total income or loss suffered in the previous year which is subject matter of regular assessment. The only finding of the Tribunal in its order is that the extent of claim for depreciation made by the assessee/ petitioner would not be a subject matter of enquiry in the block assessments. This is for the reason that the claim for higher depreciation cannot be said to be undisclosed income for the purpose of block assessment. The Tribunal had in its order while dealing with order passed in a block assessment had no occasion to examine whether or not the depreciation as claimed was permissible. It may also be pointed out that the Tribunal has recorded a finding of fact that no material was found during the course of search to establish that the claim for depreciation made was incorrect. Therefore, we are of the view that there is no finding given by the Tribunal which would enable the Assessing Officer to extend the period of limitation as provided under Section 150 of the Act for the purpose of issuing impugned notice in respect of Assessment Year 1993-94.
S. 147: A writ petition is not like an appeal where the assessee has a statutory right to require the Court to entertain the challenge. A writ will be maintained only if the notice is clearly without jurisdiction & not otherwise
We would exercise our writ jurisdiction to interdict a proceeding under Section 148 of the Act seeking to reopen an assessment only when the same is clearly without jurisdiction and not otherwise as a matter of self restraint. We are constrained to reiterate the above long settled position of self restraint in exercise of our […]
Unlike Civil Court, the Tribunal has no inherent power to put a condition for depositing an amount for adjudicating the case afresh
Maa Mahamaya Industries Ltd. Vs. Commissioner of Central Excise, Customs and Service Tax Visakhapatnam-I, Commissionerate [2014 (11) TMI 747 – Andhra Pradesh High Court]
In the instant case, a Show Cause Notice was issued by the Ld. Commissioner to Maa Mahamaya Industries Ltd. (the Appellant) and the same was adjudicated against the Appellant. Being aggrieved, the Appellant preferred an appeal before the Hon'ble CESTAT.
The Hon'ble CESTAT after considering the facts and circumstances of the case found that the present appeal needed fresh hearing by the Ld. Commissioner. Accordingly the case was remanded back to the Ld. Commissioner with some specific directions, namely supply of materials and other things. Further, a direction was also given to the Appellant to deposit Rs. 5 crores as a condition for fresh adjudication.
Being aggrieved the Appellant preferred an appeal before the Hon'ble High Court of Andhra Pradesh and contended that unlike Civil Court, the Hon'ble Tribunal has no jurisdiction to put a condition of depositing Rs. 5 crores as a pre-condition for adjudicating the matter afresh by the Ld. Commissioner.
On the other hand, the Department submitted that the Hon'ble Tribunal direction to deposit was as a measure of security and hence the aforesaid Order was passed to meet the ends of justice.
The Hon'ble High Court of Andhra Pradesh held that the Tribunal is a creature of a Statue with specific powers mentioned in the Statute itself and there is no provision under the Statue enabling the Tribunal to ask for depositing Rs. 5 crores for adjudication and the same is without jurisdiction.
Accordingly the Hon'ble High Court directed the Ld. Commissioner to adjudicate the matter without any deposit and it was further clarified that in any event, logically question of deposit does not arise unless there is an adjudication to suffer with the liability of the Appellant
There is nobody in the factory' cannot tantamount to refusal of Appellant
Instead of deciding the matter ex-parte, the Tribunal must take fresh step to serve Hearing notice to the Assessee if it is returned by the Postal Authority with a remark that "there is nobody in the factory"
Pioneer Glass Industries Vs. Commissioner of Central Excise [(2014) 50 taxmann.com 328 (High Court of Allahabad)]
In the instant case, the Revenue filed an appeal against the Order of the Commissioner (Appeals) before the Hon'ble Tribunal. Pioneer Glass Industries (the Appellant) also filed a cross objectionin respect of the Revenue's Appeal.
Thereafter, a notice was issued to the Appellant, which was returned with the endorsement of postal authorities that "there is nobody in the factory".
Consequently, the Appellant could not appear before the Hon'ble Tribunal on the day of hearing. The Hon'ble Tribunal proceeded to decide the appeal on merits and allowed the appeal of the Revenue vide its Order dated February 3, 2011 and disposed off the cross objection of the Appellant.
Later on, the Appellant filed an application to the Hon'ble Tribunal for restoration of appeal, which was dismissed on ground that the Appellant's cross objections had been considered while deciding the matter in favour of the Revenue. Being aggrieved, the Appellant preferred an appeal before the Hon'ble High court of Allahabad.
The Hon'ble High Court of Allahabad held that an endorsement by the postal authority that "there is nobody in the factory" cannot tantamount to refusal of the Appellant nor it can be read as factory is closed. The Tribunal ought to have taken fresh steps for service of notice to the Appellant in the manner prescribed under law. Hence, the Tribunal had committed an error by rejecting application of the Appellant.
It was further held that there is sufficient reason to recall the Order of Tribunal dated February 3, 2011 and for hearing the matter on merits afresh. Accordingly, the restoration application of the Appellant was allowed.
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Detailed Judgment already attached in earlier mail.
S. 220(6): Parameters to be considered in deciding a stay application laid down
The parameters to be considered in deciding stay application as laid down by this Court in KEC International Limited v/s. B. R. Balakrishnan 251 ITR 158; UTI Mutual Funds v/s. ITO 345 ITR 71 and UTI Mutual Fund v/s. ITO in W.P.(L) No.523 of 2013 rendered on 6th March 2013 which can for the purposes of disposing an application of stay can be summarized as under:
(a) The order on stay application must briefly set out the issue and the submission of the assessee/ applicant in support of the stay;
(b) In cases where the assessed income under the impugned order far exceeds returned income so as to make the demand arbitrary or the issue arising for consideration stands concluded by a decision of an higher forum or where the order appealed against is in breach of Natural Justice or the view taken in the order being appealed against is contrary to what has been held in the preceding previous years ( even if issue pending before higher forum) without there being a material change in facts or law, stay should normally be granted;
(c) If not, whether looking to the questions involved in appeal, keeping in view the likelihood of success in appeal what part of the demand the whole(in case issue covered against the applicant by a decision of higher forum) or part of it and must be justified by short reasons in the order disposing of the stay application;.
(c) Lack of financial hardship would not be a sole ground to direct deposit/payment of the demands if the assessee/applicant has a strong arguable case on merits;
(d) In cases where the assessee/applicant relies upon financial difficulties, the authority concerned should briefly indicate whether the assessee is financially sound and viable to deposit the amount or the apprehension of the revenue of non recovery later. Thus warranting deposit. This of course, if the case is not otherwise sustainable on merits;
(d) The authority concerned will also examine whether the time to prefer an appeal has expired. Generally, coercive measures may not be adopted during the period provided by the statute to go in appeal. However, if the authority concerned comes to the conclusion that the assessee is likely to defeat the demand, it may take recourse to coercive action for which brief reasons may be indicated in the order.
(e) In exercising the powers of stay, the Authority should always bear in mind that as a quasi judicial authority it is vested with the public duty of protecting the interest of the Revenue while at the same time balancing the need to mitigate hardship to the assessee. Though the assessing officer has made an assessment, he must objectively decide the application for stay considering that an appeal lies against his order; the application for stay must be considered from all its facets and the order should be passed, balancing the interest of the assessee with the protection of the Revenue.
The above guidelines are only illustrative and the authority concerned would have to have exercise his discretion in matters of stay on the facts of the case before him.
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