The assessee, a District Excise Officer, was under an obligation to collect tax at source on the sale of alcoholic liquor for human consumption from the buyer under s 206C. The assessee 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 assessee 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. The assessee contended 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 relate to the sale of goods only, therefore the tax was rightly collected on the sale price of liquor only. The AO dismissed the contention of the assessee and made an ex parte order and raised a demand under s 206C(6) and 206C(7) on the basis of licence fee/Nirgam Mulya/excise duty/issue price. The order was rectified under s 154 and the demand was deleted. The CIT revised the order under s 263 and again the demand was raised. In an appeal, CIT(A) dismissed the appeal as being not maintainable. The Tribunal held that the order was appealable under s 246(1)(a) of the Income-tax Act. Being aggrieved, the revenue has filed the present appeal.
The issue is whether an order passed under sub-s (6) or (7) of s 206C is appealable under s 246 (now s 246A(1)(a)) of the Act.
In the proceedings so undertaken by the department for fastening the liability on the assessee, the assessee is assessed under the Act and it is in the nature of assessment proceedings. Section 206C is a machinery section. It sets out the machinery for the collection of tax in advance from the specified persons by a “seller”. The expression “assessed” used in s 206C evidently has not been used in the sense of computation of income but has been used in the sense of either the determination of the amount of tax payable or the whole procedure laid down in the Act for imposing the liability upon the tax payer.
An order passed under sub-s (6) and (7) of s 206C asking a person (seller) to pay the tax or the interest for shortfall in deducting the tax at source or for late deposit of tax deducted at source the assessee is “assessed” and his denial amounts to the denial of liability to be assessed under this Act. Hence, such an order is appealable under the aforesaid clause, notwithstanding that s 206C specifically does not find a place in any of the clauses either of s 246 or s 246A of the Act.
The right to file an appeal is a statutory right. Unless a right of appeal is provided for specifically, no appeal can be filed, but it is also equally true that while interpreting the provision dealing with the right of appeal, it should be interpreted liberally in such a manner to advance the cause of justice. The assessee is a State Government employee, being the District Excise Officer. In discharge of his official duty he collected the tax at source, though according to the Income-tax Department there is a shortfall. Heavy demand running into crores has been raised. In such a situation, it does not appeal to reason to deny such a person even a right of appeal. Thus, the Tribunal was justified in holding that the appeals are maintainable under s 246 of the Income-tax Act (now s 246A(1)(a) of the Act).
An order passed under sub-s (6) or (7) of s 206C is appealable under s 246 (now s 246A) of the Income-tax Act as held by AllHC in CIT, Meerut v The District Excise Officer In favour of: The Assessee; ITA Nos. 299, 269, 270, 301-303 of 2000, 38, 41, 45, 48, 49 of 2001 and ITA Defective Nos. 26, 28 of 2001
Decided on: 31 March 2011
The issue is whether an order passed under sub-s (6) or (7) of s 206C is appealable under s 246 (now s 246A(1)(a)) of the Act.
In the proceedings so undertaken by the department for fastening the liability on the assessee, the assessee is assessed under the Act and it is in the nature of assessment proceedings. Section 206C is a machinery section. It sets out the machinery for the collection of tax in advance from the specified persons by a “seller”. The expression “assessed” used in s 206C evidently has not been used in the sense of computation of income but has been used in the sense of either the determination of the amount of tax payable or the whole procedure laid down in the Act for imposing the liability upon the tax payer.
An order passed under sub-s (6) and (7) of s 206C asking a person (seller) to pay the tax or the interest for shortfall in deducting the tax at source or for late deposit of tax deducted at source the assessee is “assessed” and his denial amounts to the denial of liability to be assessed under this Act. Hence, such an order is appealable under the aforesaid clause, notwithstanding that s 206C specifically does not find a place in any of the clauses either of s 246 or s 246A of the Act.
The right to file an appeal is a statutory right. Unless a right of appeal is provided for specifically, no appeal can be filed, but it is also equally true that while interpreting the provision dealing with the right of appeal, it should be interpreted liberally in such a manner to advance the cause of justice. The assessee is a State Government employee, being the District Excise Officer. In discharge of his official duty he collected the tax at source, though according to the Income-tax Department there is a shortfall. Heavy demand running into crores has been raised. In such a situation, it does not appeal to reason to deny such a person even a right of appeal. Thus, the Tribunal was justified in holding that the appeals are maintainable under s 246 of the Income-tax Act (now s 246A(1)(a) of the Act).
An order passed under sub-s (6) or (7) of s 206C is appealable under s 246 (now s 246A) of the Income-tax Act as held by AllHC in CIT, Meerut v The District Excise Officer In favour of: The Assessee; ITA Nos. 299, 269, 270, 301-303 of 2000, 38, 41, 45, 48, 49 of 2001 and ITA Defective Nos. 26, 28 of 2001
Decided on: 31 March 2011
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