TaxTMI 
TaxTMI 
TaxTMI 
2017 (2) TMI 37
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.... overlooked the legal and Constitutional provision that no amount of tax can be recovered without any authority of law and, therefore, the Union could not have been permitted to retain the have been permitted to retain the excess amount of tax paid by the assessee?" 3. Counsel for the appellant has relied upon the decisions of different High Courts. 3.1. In the case of S.R. Koshti Vs. Commissioner of Income Tax- (2005) 276 ITR 165, it has been held by Gujarat High Court as under: "A word of caution. The authorities under the Act are under an obligation to act in accordance with law. Tax can be collected only as provided under the Act. If an assessee, under a mistake, misconception or on not being properly instructed, is over-assessed, the authorities under the Act are required to assist him and ensure that only legitimate taxes due are collected. This Court, in an unreported decision in case of Vinay Chandulal Satia v. Shri N.O.Parekh., the Commissioner of Income Tax, Special Civil Application No. 622/1981, rendered on 20-8-1981, has laid down the approach that the authorities must adopt in such matters in the following terms : "The Supreme Court has observed in numerous de....
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.... has no occasion to deal with a question as to whether the Assessing Authority had the power to order refund while making a regular assessment under Section 143(3) of the Act. We are, therefore, of the view that this decision cannot render any assistance to the Revenue to say that the decision of the Bombay High Court is in line with the thinking of the Revenue. Merely because there are certain departmental instructions as provided in circular Ref.Na549 dated 31- 10-1989 issued by the CBDT; we arc of the view, such instructions cannot overweigh the statutory provisions of the Income Tax Act and as such we are not persuaded to hold that the circular instructions of CBDT should bind the Assessing Authority even bypassing the provisions of the IT Act. Having regard to the above discussion and in the light of sub-section (4) of Section 143 of the Income Tax Act which was inserted by way of amendment in the year, 1989, we are inclined to hold that the Assessing Authority is entitled to determine the quantum of refund also in a regular assessment made under Section 143(3) of the Act. 3.3. In the case of Commissioner of Income Tax Vs. Vali Brothers- (2006) 282 ITR 0149 (All), Allahab....
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..... The assessment proceedings that commenced with the returns filed by the assessee were lawfully terminated when they were closed with the entry 'N.A.' Thereafter, the finality of the termination of those assessment proceedings could be vacated only by recourse to Section 34, as this was not a case for the application of Section 35." 3.4. In the case of Seshammal (R.) Vs. Income-tax Officer- (1999)237 ITR 0185, Madras High Court has held as under: "The fact that the petitioner had paid the monies to the Government under the mistaken notion that the association of persons would be liable for tax even when the assessment was not required to be made as an association of persons; that the amount though paid was not actually required to be paid and that the State has not refunded those amounts by taking advantage of the mistake committed by the payer is not in dispute. The Act is not intended to benefit the State by enabling it to collect or retain monies not payable to it under the Act. What is required to be collected from the assessees under the Act is only the tax and other amounts properly payable under the Act. The argument advanced by counsel for the Revenue that S....
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....d from the position which it had wrongly taken while filing the return. Quite apart from it, it is incumbent on the income-tax department to find out whether a particular income was assessable in the particular year or not. Merely because the assessed wrongly included the income in its return for a particular year, it cannot confer jurisdiction on the department to tax that income in that year even though legally such income did not pertain to that year. We are, therefore, of the view that the income from dividend was not assessable during the assessment year 1958-59 but* it was assessable in the assessment year 1953-54. It cannot, therefore, be taxed in the assessment year 1958-59." 3.7. In the case of Jute Corporation of India Ltd. Vs. Commissioner of Income Tax and another- (1991) 187 ITR 688 (SC), the Supreme court has held as under: "Power to enhance Tax on discovery of new source of income is quite different than granting deduction on the admitted facts fully supported by the decision of this Court. If the tax liability of the assessee is admitted and if the Income Tax Officer is afforded opportunity of hearing by the Appellate Authority is allowing the assessee's cla....
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....r of assessment passed by the Income Tax Officer." 3.8. In the case of National Thermal Power Co. Ltd. Vs. Commissioner of Income-tax- (1998) 229 ITR 0383, the Supreme Court has held as under: "3. The assessee contended that on account of two orders of Special Benches of the Tribunal in the cases of Arasan Aluminium Industries (P) Ltd. and Nagarjuna Steels Ltd., the assessee learnt that the interest earned in this manner before the setting up of business is not taxable as income and it goes to reduce the capital cost of the plant. On learning about this legal position, the assessee sought to include the above three grounds in its grounds of appeal. The Tribunal has declined to entertain these additional grounds. 4. The Tribunal has framed as many as five questions while making a reference to us. Since the Tribunal has not examined the additional grounds raised by the assessee on the merits, we do not propose to answer the questions relating to the merits of those contentions. We reframe the question which arises for our consideration in order to bring out the point which requires determination more clearly. It is as follows: Where on the facts found by the authorities bel....
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....llate Assistant Commissioner must be satisfied that the ground raised was bona fide and that the same could not have been raised earlier for good reasons. The Appellate Assistant Commissioner should exercise his discretion in permitting or not permitting the assessee to raise an additional ground in accordance with law and reason. The same observations would apply to appeals before the Tribunal also." 3.9. In the case of Ahmedabad Electricity Co. Ltd. Vs. Commissioner of Income-tax- (1993) 199 ITR 351 (Bom), the Bombay High Court has held as under: "In the case of the Appellate Assistant Commissioner there is an express power granted to him to enhance the tax liability. This is because the Department does not have a right of appeal before the Appellate Assistant Commissioner. As far as the Appellate Tribunal is concerned, the case may be, if it is aggrieved by any part of the order of the Appellate Assistant Commissioner. Therefore, any express power of enhancement has not been conferred on the Appellate Tribunal. The Tribunal can, in a given case, in dealing with an appeal filed by the Department or considering its cross-objections, enhance the tax liability of the assessee if....
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.... law. The task of an appellate authority under the taxing statute, especially a nondepartmental authority like the Tribunal, is to address its mind to the factual and legal basis of an assessment for the purpose of properly adjusting the taxpayer's liability to make it accord with the legal provisions governing his assessment. Since the be-all and end-all of the statutory provisions, especially those relating to the administration and management of income-tax, is to ascertain the tax-payers' liability correctly, to the last pie, if it were possible, the various provisions relating to appeal, second appeal, reference and the like can hardly be equated to a lis or dispute as arises between the two parties in a civil litigation. Although the income-tax statute makes the Department or its officers figure as parties in appeal proceedings, they are not in the strict sense what are called by American writers as parties to adversary proceedings. This is so, because the very object of the appeal is not to decide a point raised as a dispute, but any point which goes into the adjustment of the taxpayer's liability. In that sense, a view prevails, even in England, that the authorit....