Case: Commissioner of Income Tax, West Bengal Vs. Wesman Engineering Company Private Limited

in the affirmative and in favour of the assessee by order dated February 10, 1976. The department filed an application for leave to appeal to the Supreme Court and the High Court by order dated September 8, 1977 citified it to be a fit case for appeal to the Supreme Court under Section 261 of the Income Tax Act, 1961 and issued a certificate accordingly 8. We have heard Mr. S. C. Manchanda, senior 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 Section 195(2) of the Income Tax Act, 1961 (hereinafter referred to as the Act) was not appealable to AAC under Section 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 Article 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 Section 248 Income Tax Act, 1961, the Appellant 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 Section 195 thereof ?" * The above question does not contain the objection that no appeal was maintainable under Section 248 of the Act against the order of the Income Tax Officer passed under Section 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 Section 248 of the Act 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 Section 195 thereof. The argument thus raised by Mr. Manchanda before us that order under Section 195(2) was not appealable under Section 248 of the Act, is not available. Even otherwise the language of Section 248 of the Act, is wide enough to cover any order passed under Section 195 of the Act. The case Meteor Satellite Ltd. v. ITO ( 1980 (121) ITR 311 (Guj)) 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 Section 248. It was also argued that the AAC was also wrong in allowing the expenses at 75 per cent of the remittance. It would be proper to reproduce Section 248 of the Act which reads as under "248. Appeal by person denying liability to deduct tax. - Any person having in accordance with the provisions of Section 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." * 11. It was argued by Mr. Manchanda that under Section 248 a person could deny his liability to make such deduction but there was no 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. Section 248 makes a mention of Sections 195 and 200 and it does not speak of the sub-clauses of Section 195 either (1) or (2). When once an appeal has been preferred to the ACC on the matter of liability of the company to deduct taxes, the AAC is well within his competence to pass an order on the quantum also. In our opinion the AAC was also competent to pass an order with regard to quantum when once he is seized of the matter. Under Section 248 a person having deducted and paid tax under Section 195 may appeal to the AAC denying his liability to make such deduction and for a declaration that he is not liable to make such deduction. It is thus difficult for us 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 Section 248 is clear and we cannot accept the view sought to be propounded by Mr. Manchanda that such a right is restricted and the AAC 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. Section 251 of the Act provides with the powers of the Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals). Clause (c) sub-section (1) of Section 251 reads as under"251. (1) (c) - in any other case, he may pass such orders in the appeal as he thinks fit." 12.

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

Explanation:
0[ds]9. It was contended by Mr. Manchanda that the order passed by the Income Tax Officer under Section 195(2) of the Income Tax Act, 1961 (hereinafter referred to as the Act) was not appealable to AAC under Section 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 Article 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 Highn our opinion the AAC was also competent to pass an order with regard to quantum when once he is seized of the matter. Under Section 248 a person having deducted and paid tax under Section 195 may appeal to the AAC denying his liability to make such deduction and for a declaration that he is not liable to make such deduction. It is thus difficult for us 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 Section 248 is clear and we cannot accept the view sought to be propounded by Mr. Manchanda that such a right is restricted and the AAC 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. Section 251 of the Act provides with the powers of the Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals)