The Tribunal found that a tax payer can manage his affairs to reduce tax liability within the frame work of law and that the sale of goods at a lesser price to the sister concerns than to the non-sister concerns, does not violate any provision of law.
From a plain reading of sub-section (2) of Section 54 of the Income-tax Act, 1961, it is clear that only section 139 of the Income-tax Act, 1961, is mentioned in section 54(2) in the context that the unutilized portion of the capital gain on the sale of property used for residence should be deposited before the date of furnishing the return of the Income-tax under section 139 of the Income-tax Act. Section 139 of the Income- tax Act, 1961, cannot be meant only section 139(1), but it means all sub-sections of section 139 of the Income-tax Act, 1961. Under sub-section (4) of section 139 of the Income-tax Act any person who has not furnished a return within the time allowed to him under sub-section (1) of Section 142 may furnish the return for any previous year at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment year whichever is earlier.
Section 263 of the Act empowers the Commissioner of Income Tax to call for and examine the record of any proceeding, if he finds that any order passed therein by the Income Tax Officer is erroneous in so far as it is prejudicial to the interests of the revenue. But such order can be passed after giving an opportunity of being heard to the assessee. The show cause notice was issued in respect of matters under Sections 32 AB and 80 HHC of the Act and not in respect of other matters, therefore the show cause notice to be quashed only in respect of matters which were not subject matter of the show cause notice.
In the present case, the Ld. AO made changes in the original order by invoking sec 154 based on evidences and disallowed a certain sum of expenditure which were related to previous years and as told found to be of capital in nature too. On appeal to CIT by the assessee, an order was passed for providing an opportunity of being heard to the assessee.
We do not find that the assessee is entitled to stay of recovery proceedings during the limitation period for the filing of the appeal. There is no deemed stay of liability after the enforceable order is passed by an authority under the statute. In view of the above, mere fact that the petitioner had time limit to file an appeal does not bar the revenue to execute the order passed.
The land in question abuts National Highway 73 and that the acquired land is extensively developed area and is near to Government College, Saket Hospital, District Headquarters/Mini Secretariat, General Hospital, Panchkula than Sectors 24 to 28, Panchkula for which land was acquired in the year 1989. Thus, the land acquired in 1995 was an urban land in close proximity with District Headquarter and much closer to the District Headquarter than the land of the assessee itself acquired in the year 1989.
Therefore, we are of the opinion that right of consideration in appeal and on an application for waiver of pre-deposit, is a right conferred by the Statute and such right cannot be defeated on the basis of Circular, which contemplates that the recovery can be effected, is stay is not granted within 30 days.
When the order was passed by the Tribunal on 09.10.2000, the Revenue had only remedy of seeking reference in terms of the then Section 35-G of the Act from the Tribunal. If the Tribunal does not refer the questions of law for the opinion of this Court, the aggrieved party could invoke jurisdiction of this Court under Section 35-H of the Act. It was in these terms, the jurisdiction of this Court was invoked by the Revenue against the order dated 09.10.2000 passed by the Tribunal. The opinion rendered by the High Court, on such reference sought by the Revenue, is binding on the authorities under the Act. The Tribunal is to give effect to the order passed by this Court. We find that the appellant has sought to confuse the provisions then existing and after amendment with effect from 14.5.2003 substituting Section 35-G by Section 144 of the Finance Act, 2003.
We do not find any merit in such argument. The Commissioner of Income Tax (Appeals), Ludhiana, recorded a finding that the Assessing Officer has reported that the voluminous nature of entries cannot be verified. Once the Assessing Officer himself has failed to verify the entries, there is no reason to disallow the distribution expenses. It is a rule of thumb which was applied by the Commissioner of Income Tax (Appeals), Ludhiana to allow expenses to the tune of 40%, which has been found to be unjustified by the Tribunal.
It is well settled in law that a tax withholding liability is a vicarious liability, as a part of tax collection mechanism, in the sense that when there is no primary liability of the taxpayer, proxy liability of the tax deductor also does not survive. In a situation like the one, we are in seisin of, in which the CBDT itself accepts that there is hardly any primary tax liability of the recipients of income.
