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2011 Supreme(All) 971
ALLAHABAD HIGH COURT
F.I.Rebello;CJ, Prakash Krishna, J.
Commissioner of Income Tax & Anr. -Appellant
Versus
District Excise Officer -Respondent
Income-tax Appeal No. 299 of 2000
Decided On : 31-03-2011
A.N.Mahajan, A.Kumar, BJ.Agarwal, D.Awasthi, G.Krishna, R.K.Upadhyay, S.Kumar, for Appellants., S.P.Kesarwani, for Respondents.
The main legal point established is that orders passed under sub sections (6) and (7) of Section 206C of the Income Tax Act are appealable if the assessee is assessed and denies liability to be assessed under the Act.
Headnote:
Income Tax Act - Appealable orders - Section 206C - Summary
Fact of the Case:
The District Excise Officer collected tax at source on the sale of alcoholic liquor but was alleged to have short collected tax on the basic licence fee and excise duty. The department raised demands under sub sections (6) and (7) of Section 206C. The officer denied liability to collect tax on licence fee or excise duty, leading to a series of appeals and tribunal decisions.
Finding of the Court:
The court found that the orders passed under sub sections (6) and (7) of Section 206C were appealable as the officer was assessed under the Act and denied liability to be assessed. The court held that the appeals were maintainable under Section 246A (1) (a) of the Income Tax Act.
Issues: The main issue was whether the orders passed under sub sections (6) and (7) of Section 206C were appealable under Section 246A (1) (a) of the Income Tax Act.
Ratio Decidendi: The court interpreted the phrase 'an order against the assessee where the assessee denies his liability to be assessed under this Act' in Section 246A (1) (a) to include orders passed under sub sections (6) and (7) of Section 206C, as the officer was assessed and denied liability to be assessed.
Final Decision: The court dismissed the appeals, holding that the orders under sub sections (6) and (7) of Section 206C were appealable under Section 246A (1) (a) of the Income Tax Act.
1. Raising a common question of law , the Commissioner of Income Tax has challenged the various orders passed by the Income Tax Appellate Tribunal on different dates by filing the present appeals under Section 260A of the Income Tax Act (hereinafter referred to as the Act).
2. The question involved is ?
"Whether on the facts and circumstances of the case the ITAT is legally justified in holding that an order passed under sub sections (6) and (7) of Section 206C of the Income Tax Act is appealable under Section 246 of the Act.
3. The following Assessment Years are involved in all the appeals:
Income Tax Appeals
Assessment Years
299 of 2000
1992-1993
269 of 2000
1997-1998
270 of 2000
1998-1999
301 of 2000
1994-1995
302 of 2000
1995-1996
303 of 2000
1991-1992
38 of 2001
1993-1994
41 of 2001
1996-1997
45 of 2001
1994-1995
48 of 2001
1995-1996
49 of 2001
1989-1990
26 of 2001 (Defective)
1990-1991
28 of 2001 (Defective)
1997-1998
4. The District Excise Officer is the assessee in all these appeals. He was under an obligation to collect the tax at source on the sale of alcoholic liquor for human consumption from the buyer under Section 206C. The District Excise Officer did collect the tax at source from the buyers but according to the department it was short. The stand of the department is that the District Excise Officer has collected the tax at source only on the cost of the country liquor but was required to collect the tax at source on basic licence fee and excise duty also. Thus, there was short collection of tax.
5. The assessee filed the returns from time to time disclosing the tax collected at source and deposited by it. The case of the assessee is that it was not responsible or obliged to collect the tax on licence fee or excise duty. The words 'buyer' and 'seller' as statutorily defined in the aforesaid Section relate to sale of goods only. Therefore, he has collected the tax on the sale price of liquor only rightly. The Assessing Officer after calling upon the assessee by serving a show cause notice by orders of different dates ultimately rejected the aforesaid contention of the assessee that it was liable to collect the tax at source only on the price of the country liquor and raised the demands under sub sections (6) and (7) of Section 206C. Just to complete the narration of facts it is sufficient to state that for the assessment years 1991-1992 to 1995-1996 an exparte common order was passed on 20.2.1997 creating a demand of Rs.81,73,630.00 and interest Rs.1,02,88,586.00 total Rs.1,84,90,216.00 towards the short collection of tax at source on the basic licence fee/Nirgam Mulya/excise duty/issue price. This order was rectified and demand was cancelled under Section 154 of the Act. The rectification order was subject matter of revision before the Commissioner of Income Tax under Section 263 of the Act and was set aside, by restoring the matter to the Assessing Officer. After remand the liability was again fastened by the Assessing Officer by the order dated 5th of September, 1997. The matter was carried in appeal before the Commissioner of Income Tax (A) who dismissed the appeal being not maintainable. The matter was carried further in second appeal before the Income Tax Appellate Tribunal. There was a difference of opinion between the two members of the Tribunal and the matter was referred to the third member i.e. President of the Tribunal who agreed with the Accountant member holding that the appeal under Section 246(1) before the First Appellate Authority was maintainable. It may not be out of place to mention here that the Tribunal by majority has held that the appeal is maintainable under Section 246(1) (a) of the Act. The said order is under challenge in these appeals.
6. Heard Sri A.N. Mahajan, learned senior standing counsel for the Department and Sri S.P. Kesarwani, learned standing counsel for the assessee.
7. The main thrust of the argument of the Department is that only those orders which are specified under Section 2
