Appeal to CIT(A) : S. 143(1) and S. 246 of Income-tax Act, 1961 : A.Y. 1995-96: CIT(A) allowed appeal in respect of one claim and rejected in respect of another : Not justified : Claims on basis of facts on record should be considered : Tax can be collect

[Balmukund Acharya v. Dy. CIT, 176 Taxman
316 (Bom.)]

In the return of income for the A.Y. 1995-96 the
assessee had computed long-term capital gain on sale of godown taking the cost
of acquisition as Nil. However, he had not claimed exemption of the capital
gain. The Assessing Officer passed an order u/s.143(1) of the Income-tax Act,
1961 and sent an intimation and demand notice including interest u/ s.234C of
the Act. In appeal before the CIT(A) the assessee raised two grounds. In the
first ground the assessee claimed that the interest liability u/s.234C is not
applicable in the case of capital gain, as there was no obligation for payment
of advance tax. In the second ground the assessee claimed that there is no tax
liability on the capital gain, since the cost of acquisition was Nil. The
CIT(A) allowed the first ground and directed the Assessing Officer to
recalculate the same. The Tribunal rejected the assessee’s appeal.

On appeal by the assessee, the Bombay High Court allowed the
assessee’s claim and held as under : “(i) For the A.Y. 1995-96, appeal lies
against an intimation u/s.143(1).

(ii) 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 any assessee, under a mistake, misconceptions or on
not being properly instructed, is over-assessed, the authorities under the Act
are required to assist him and ensure that only due legitimate taxes are
collected. If a particular levy is not permitted under the Act, tax cannot be
levied by applying the doctrine of estoppel.

(iii) Acquiescence cannot take away from a party the relief
that she is entitled to where the tax is levied or collected without
authority of law. In the instant case, it was obligatory on the part of
the Assessing Officer to apply his mind to the facts disclosed in the
return and assess the assessee, keeping in mind the law holding the field.

 

(iii) One more aspect needs to be touched while
disposing of the appeal. The
Commissioner (Appeals) had entertained appeal in part and rejected in part.
If the appeal is not maintainable, it is not maintainable at all. It cannot
be said that for a particular ground, an appeal is maintainable and for
another it is not. Once the appeal is filed and entertained, then all
grounds can be raised by the appellant requiring consideration. If the
Revenue was of the view that an appeal itself was not maintainable before
the Commissioner (Appeals), in that event, the order of the Commissioner
(Appeals) allowing appeal in part was bad order and that part of the order
ought to have been challenged by the Revenue. The Revenue did not challenge
the said order believing maintainability of the appeal. The Revenue at that
stage could not be allowed to contend otherwise. It could not be allowed to
blow hot and cold. Thus, taking an overall view of the matter and for the
reasons recorded, the appeal preferred by the assessee was very much
maintainable.”