Case: Commissioner Of Income Tax, West Bengal Vs. Wesman Engg. Co. (P.) Ltd

and the High Court by order dated 8-9-1977 certified it to be a fit case for appeal to the Supreme Court under S.261 of the Income Tax Act. 1961 and issued a certificate accordingly. 8. We have heard Mr. S.C. Manchanda. Sr. Advocate for the appellant but nobody appeared for the respondent. The High Court in answering the reference placed reliance on its earlier judgment dated August 12.1970 but the copy of the said judgment has not been supplied in the paper book as such we were deprived to go through the reasoning given by the High Court in answering the reference in the affirmative and in favour of the assessee. 9. It was contended by Mr. Manchanda that the order passed by the Income Tax Officer under S.195 (2) of the Income Tax Act. 1961 (hereinafter referred to as the Act) was not appealable to AAC. under S.248 of the Act. His further contention was that the order passed by AAC. was totally without jurisdiction and the only remedy available to the assessee was to file a writ petition to High Court under Art.226 of the Constitution of India. In our opinion this question does not arise before us nor such question was raised in the reference before the High Court. The Commissioner of Income Tax only sought to refer the following question for the opinion of the High Court: "Whether. on the facts and circumstances of the case in appeal filed under S.248 Income Tax Act. 1961. the Appellate Assistant Commissioner had jurisdiction to deal with the quantum of the sum chargeable under the provision of the said Act from which the assessee was liable to deduct tax under S.195 thereof?" The above question does not contain the objection that no appeal was maintainable under S.248 of the Act against the order of the Income Tax Officer passed under S.195(2) of the Act. The High Court was not called upon to decide any question of jurisdiction as sought to be raised by Mr. Manchanda before us nor the High Court has granted any certificate in this regard. So far as the question referred to the High Court is concerned. its language shows that there was no controversy about the appeal filed under S.248 of the Aa and the only question raised was whether the AAC. had jurisdiction to deal with the quantum of the sum chargeable under the provisions of the said Act from which the assessee was liable to deduct tax under S.195 thereof. The argument thus raised by Mr. Manchanda before us that Order under S.195(2) was not appealable under S.248 of the Act. is not available. Even otherwise the language of S.248 of the Act is wide enough to cover any order passed under S.195 of the Act. The case Meteor Satellite Ltd. v. Income Tax Officer. Companies Circle-IX. Ahmedabad (1980) 121 ITR p. 311 cited in support of the above contention by Mr. Manchanda is of no relevance. 10. It was next contended by Mr. Manchanda that the AAC. was wrong in holding that the quantum of income could be determined in an appeal under S.248. It was also argued that the A AC. was also wrong in allowing the expenses as 75% of the remittance. It would be proper to reproduce S.248 of the Act which reads as under: Section 248: Appeal by Person Denying Liability to Deduct tax: "Any person having in accordance with the provisions of S.195 and 200 deducted and paid tax in respect of any sum chargeable under this Act. other than interest. who denies his liability to make such deduction. may appeal to the Deputy Commissioner (Appeals) or. as the case may be. the Commissioner (Appeals) to be declared not liable to make such deduction." 12. It was argued by Mr. Manchanda that under S.248 a person could deny his liability to make such deduction but there was ho power to determine the quantum and to say as to what extent the said remittance will be taxed. We find no force in the above contention. S.248 makes a mention of S.195 and 200 and it does not speak of the sub-clauses of S.195 either (1) or (2). When once an appeal has been preferred to the A.AC. on the matter of liability of the company to deduct taxes. the A.A.C. is well within his competence to pass an order on the quantum also. In our opinion the A.A.C. was also competent to pass an order with regard to quantum when once he is seized of the matter. Under S.248 a person having deducted and paid tax under S.195 may appeal to the A AC. denying his liability to make such deduction and for a declaration that he is not liable to make such deduction. It is thus difficult to accept the argument that total denial may enable an appeal to be filed but not a part denial with reference to part of the payment subjected to deduction of tax. The right of appeal given under S.248 is clear and we cannot accept the view sought to be propounded by Mr. Manchanda that such a right is restricted and the A.A.C was not competent to fix the quantum or to revise the proportion of the amount chargeable under the provisions of the Act as determined by the Income Tax Officer. S.251 of the Act provides with the powers of the Deputy Commissioner (Appeals) or. as the case may be. the Commissioner (Appeals) Clause (c) of Sub-Sec. (1) of S.251 reads as under: S.251 (1)(c): "In any other case. he may pass such orders in the appeal as he thinks fit." 13. The above provision gives full power to the Appellate authority to pass such orders in I the appeal as he thinks fit. There is no controversy before us that appeal could lie before A.A.C. under S.248 of the Act. We are thus in agreement with the view taken by the High Court and the Income Tax Appellate Tribunal.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]In our opinion this question does not arise before us nor such question was raised in the reference before the High Court. The Commissioner of Income Tax only sought to refer the following question for the opinion of the Highon the facts and circumstances of the case in appeal filed under S.248 Income Tax Act. 1961. the Appellate Assistant Commissioner had jurisdiction to deal with the quantum of the sum chargeable under the provision of the said Act from which the assessee was liable to deduct tax under S.195above question does not contain the objection that no appeal was maintainable under S.248 of the Act against the order of the Income Tax Officer passed under S.195(2) of the Act. The High Court was not called upon to decide any question of jurisdiction as sought to be raised by Mr. Manchanda before us nor the High Court has granted any certificate in this regard. So far as the question referred to the High Courtis concerned. its language shows that there was no controversy about the appeal filed under S.248 of the Aa and the only question raised was whether the AAC. had jurisdiction to deal with the quantum of the sum chargeable under the provisions of the said Act from which the assessee was liable to deduct tax under S.195 thereof. The argument thus raised by Mr. Manchanda before us that Order under S.195(2) was not appealable under S.248 of the Act. is not available. Even otherwise the language of S.248 of the Act is wide enough to cover any order passed under S.195 of thecase Meteor Satellite Ltd. v. Income Tax Officer. CompaniesAhmedabad (1980) 121 ITR p. 311 cited in support of the above contention by Mr. Manchanda is of nofind no force in the above contention. S.248 makes a mention of S.195 and 200 and it does not speak of theof S.195 either (1) or (2). When once an appeal has been preferred to the A.AC. on the matter of liability of the company to deduct taxes. the A.A.C. is well within his competence to pass an order on the quantum also. In our opinion the A.A.C. was also competent to pass an order with regard to quantum when once he is seized of the matter. Under S.248 a person having deducted and paid tax under S.195 may appeal to the A AC. denying his liability to make such deduction and for a declaration that he is not liable to make such deduction. It is thus difficult to accept the argument that total denial may enable an appeal to be filed but not a part denial with reference to part of the payment subjected to deduction of tax. The right of appeal given under S.248 is clear and we cannot accept the view sought to be propounded by Mr. Manchanda that such a right is restricted and the A.A.C was not competent to fix the quantum or to revise the proportion of the amount chargeable under the provisions of the Act as determined by the Income Tax OfficerS.251 of the Act provides with the powers of the Deputy Commissioner (Appeals) or. as the case may be. the Commissioner (Appeals) Clause (c) of(1) of S.251 reads asn any other case. he may pass such orders in the appeal as he thinks fit.The above provision gives full power to the Appellate authority to pass such orders in I the appeal as he thinks fit. There is no controversy before us that appeal could lie before A.A.C. under S.248 of the Act. We are thus in agreement with the view taken by the High Court and the Income Tax Appellate Tribunal.