TaxTMI 
TaxTMI 
2015 (3) TMI 486
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....is resignation was accepted by the Board on 23rd December, 2002. He also resigned as a Director of the Company subsequently on 2nd June, 2005. Meanwhile, the return of income of the Company, filed for assessment year 2003-04 on 1.12.2003, was signed by the Appellant in his capacity as a Director. The assessment of the Company for assessment year 2003-04 was completed by the Assessing Officer on 20th February, 2006 and an order imposing penalty under S.271(1)(c) amounting to Rs. 2,37,039 was also passed by him on 30th August, 2006. Although no appeal apparently was filed by the Company against the order passed by the Assessing Officer under S.143(3), an appeal against the order imposing penalty under S.271(1)(c) was filed by it before the learned CIT(A) on 29th September, 2006. The learned CIT(A) vide his appellate order dated 30th November, 2007 dismissed the said appeal and confirmed the penalty imposed by the Assessing Officer under S.271(1)(c). The Company did not file any appeal against the said order of the learned CIT(A) before the Tribunal. 3. Subsequently, on 30th March, 2009, a show-cause notice was issued by the Assessing Officer, proposing to launch prosecution procee....
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....nding of the offence, by filing a letter dated 15.3.2010, the Assessing Officer vide letter dated 4.8.2011 required the assessee to make the payment of penalty imposed under S.271(1)(c) amounting to Rs. 2,37,039. He contended that the proceedings for collection of penalty and the proceedings in consequence to filing of the compounding application thus are also pending and the Appellant therefore is required to be considered as an assessee within the meaning of S.2(7) of the Act. 6. The learned counsel for the appellant further contended that the Appellant was a Director of the assessee Company at the relevant time and the said company being a private limited company, he would be liable jointly and severally for the payment of tax due by the company as per the provisions of S.179. He contended that the Appellant is therefore, required to be treated as an assessee as per clause (c) of S.2(7), being a person who is deemed to be an assessee in default. In support of this contention, he relied on the decision of the Hon'ble Bombay High Court in the case of Union of India and Others V/s. Manik Dattatreya Lotlikar (172 ITR 1). 7. The Learned Counsel for the appellant further sub....
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....ur attention to the letter dated 4.8.2011 issued by the Assessing Officer (copy at page 4 of the paper-book) and pointed out that the assessee is requested to pay the outstanding demand pending in the name of the Company, in order to consider his request for compounding the offence as per the provisions of S.279(2) of the Act and it cannot be said on the basis of the said letter that the demand payable by the Company for the year under consideration is payable by the appellant. He contended that there is in fact no provision in the Act, whereby the outstanding demand of the Company can be recovered from the appellant and the only provision of S.179 relied upon by the learned counsel for the appellant is applicable only in the case of private Company in liquidation. As regards the case laws cited by the learned counsel for the appellant, he submitted that none of the same is applicable in the fact situation of the present case of the appellant. He contended that the Appellant thus cannot be considered as assessee aggrieved by the order of the learned CIT(A) confirming the penalty imposed by the Assessing Officer under S.271(1)(c) and the present appeal filed by him is not maintainab....
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....M/s. Suvistas Software Pvt Ltd- assessment year -2003- 04- Compounding -Reg. Ref: Your letter dated 15.03.2010 filed in the office of the Chief Commissioner of Income Tax-3,Hyderabad on 19.03.2010. ******** Please refer to the above. Vide the letter cited in the reference, you have requested the Chief Commissioner of Income Tax -3, Hyderabad to compound the offence as per the provisions of section 279(2) of the Income Tax Act 1961 . In order to consider your request for compounding of offences, the tax as well as interest and penalty relating to the assessment year 2003-04 should be paid. It is verified from this office record, the tax demand of Rs. 2,32,554/- raised under section 143(3) on 20.02.2006 and penalty demand of Rs. 2,37,039/- raised under section 271(1)(c) on 31.08.2006 were not paid fully. In this context. you are requested .to pay the amounts immediately and file the chalans. If the amounts were already paid, please produce the chalans. Yours faithfully, ........" 12. A perusal of the above letter dated 4.8.2011 issued by the Assessing Officer clearly shows that there is nothing in the said letter to show that the amount of penalty in question ....
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....ity of directors of a private company in liquidation and in the present case, although the assessee is a private company, the same not being in liquidation, the appellant, as a Director, cannot be said to be jointly and severally liable for the payment of any tax in relation to the said company. 15. In support of his contention raised in support of the appellant's case relying on the provision of S.179, the learned counsel for the assessee has relied on the decision of the Hon'ble Bombay High Court in the case of Union of India V/s. Manik Dattratreya Lotlikar (supra). A perusal of the decision rendered by the Hon'ble Bombay High Court in the said case however shows that the concerned private company of which the assessee was director was already in liquidation and the issue involved before the Hon'ble High Court was entirely different, i.e. whether the provisions of S.179 are applicable retrospectively or not. The learned Single Judge had earlier held in this context that the liability of the Director under S.179 is only in respect of tax due from the private company, after 1st October, 1975 and not in respect of earlier period, and on appeal preferred by the revenue....
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....be jointly and severally liable for the payment of tax only and that too, only in case that company goes into liquidation. In the present case, such situation, however, is not obtained in as much as the private company of which the appellant was a Director, is not in liquidation and the amount payable by the said company is on account of penalty which, in any case, cannot be recovered from the appellant as a director of the said company. We therefore, hold that the appellant in the present case cannot be said to be an assessee within the meaning of S.2(7) as he is not a person by whom any tax or any other sum of money is payable under the Act. 18. Having held that the appellant cannot be considered as an assessee within the meaning of S.2(7), it follows that the question of treating the appellant as an ' assessee aggrieved', as envisaged under S.253, does not arise. However, since the learned counsel for the appellant has cited certain judicial pronouncements to support his contentions raised relying on the provisions of S.253, and there are also other judicial pronouncements explaining the scope and meaning of the term 'assessee aggrieved', we consider it necessary to discuss a....
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....passed by the AAC is not confined technically to the party who is a party to the appeal but is a much wider right which might be exercised by any person who is liable to pay tax by any other order against which the appeal was preferred. In the case of MICO Employees Association V/s. ACIT (292 ITR 567) before the Hon'ble Karnataka High Court, there was a dispute between the MICO Employees Association and the Department regarding TDS vis-à-vis service of employees and the appeal filed by the Employees Association was held to be not maintainable by the Hon'ble High Court holding that only an assessee whose liability is to pay tax in terms of an order, is provided with the right of appeal under S.253. It was held that though the Employees Association might be an aggrieved party to certain extent, it was not an assessee in terms of definition given in S.2(7) of the Act, which would mean a person from whom any tax or a sum of money is payable. It was held that in terms of the statute only the assessee who is liable to pay tax in terms of the order alone is provided with the right to appeal, though, to a certain extent, association may be an aggrieved party, it is not an as....