BHARAT STRAWBOARD & PAPER MILLS (P) LTD. v. INCOME TAX OFFICER
[Citation -1986-LL-0313-3]

Citation 1986-LL-0313-3
Appellant Name BHARAT STRAWBOARD & PAPER MILLS (P) LTD.
Respondent Name INCOME TAX OFFICER
Court ITAT
Relevant Act Income-tax
Date of Order 13/03/1986
Assessment Year 1979-80, 1982-83
Judgment View Judgment
Keyword Tags procedural in nature • draft assessment • prescribed time • special bench • personal use
Bot Summary: 1980-81 to 1982- 8 3 is that the CIT was not justified in holding that no appeal lay under s. 246(1) in respect of these assessment years, as the assessee had failed to file objections under sub-s. of s. 144B to the draft assessment orders sent by the ITO under s. 144B(1). The CIT did not feel impressed by the argument of the assessee that the provisions of s. 144B were only procedural in nature and that if those provisions were not availed of by the assessee, the assessee could not be debarred from filing appeal under s. 246. According to s. 246(1), an appeal lies only if any assessee is aggrieved by an order of the ITO. By not raising any objection to the draft assessment orders the assessee deprived the ITO and the IAC from making further enquiries and scrutiny into the facts and circumstances. The entire provisions of s. 144B are meant to be procedural in character in regard to the making of the assessment and they have nothing to do with the right of an assessee either to file an appeal or agitate the matter against the assessment in any forum as envisaged under law. The first one deals with a case where no objections are received and the second deals with a case where the assessee intimates the acceptance of a variation proposed by the ITO. Had the assessee accepted the assessment under the second limb of s. 144B(3), it might have lost its right of appeal, but mere omission to file objections under the first limb of that section would not mean that the assessee had accepted the variation. Respectfully following the above stated decision, we hold in the present appeals that the CIT was not justified in giving the finding that the appeals filed by the assessee were not maintainable on the ground that the assessee had failed to raise any objections to the draft assessment orders. The assessee's not raising objections to the proposed order of assessment does not amount to the assessees agreeing to the proposed addition.


These four appeals filed by assessee in respect of its assessments for asst. yrs. 1979-80 to 1982-83 were, for sake of convenience, consolidated and heard together. After hearing rival submissions, these appeals are being disposed of by common order as under. ground taken in appeal in respect of asst. yr. 1979-80 is that CIT (A) was not justified in confirming disallowance of Rs. 4,000 out of vehicle expenses, as made by ITO in account of personal use of car by Directors of company. total expenditure during year on maintenance of vehicle had amounted to Rs. 33,441. ITO had disallowed sum of Rs. 4,000 out of this expenditure on account of non business use of car. It is pointed out by authorised representative of assessee that for preceding year disallowance was only of sum of Rs. 2,400. For year under consideration, we hold that addition be restricted to Rs. 2,500. common ground of appeal in respect of asst. yrs. 1980-81 to 1982- 8 3 is that CIT (A) was not justified in holding that no appeal lay under s. 246(1) in respect of these assessment years, as assessee had failed to file objections under sub-s. (2) of s. 144B to draft assessment orders sent by ITO under s. 144B(1). CIT (A) was of view that, since assessee had not filed any objections to draft assessment orders, it was to be presumed that assessee had agreed with proposed additions. Hence, CIT (A) was of view that assessee in that case could not be considered to have been "aggrieved" by orders of assessment and as such assessee could not make appeal under s. 246(A). CIT (A) did not feel impressed by argument of assessee that provisions of s. 144B were only procedural in nature and that if those provisions were not availed of by assessee, assessee could not be debarred from filing appeal under s. 246. CIT(A) has stated as under: "I have considered submissions carefully. According to s. 246(1), appeal lies only if any assessee is "aggrieved" by order of ITO. By not raising any objection to draft assessment orders assessee deprived ITO and IAC from making further enquiries and scrutiny into facts and circumstances. It appears to me that when no objections are received to draft assessment orders within prescribed time, it amounts to acquiescence by assessee to draft assessment orders. In those cases assessee cannot be said to be "aggrieved". Reliance is placed on decision of Hon'ble Allahabad High Court in case of Sterling Machine Tools vs. CIT (1980) 123 ITO 181 (All)". question whether assessee was debarred to file appeal in above stated circumstances was considered by Special Bench of Tribunal, Bombay in case of ITO vs. Sippy Films (1982) 14 TTJ 368 (Bom) (SB). Tribunal vide its decision dt. 24th May, 1982 reported at page 533 of TAXMAN's Selected orders of Tribunal dt. 2 held that it was well known that right of appeal was statutory right and once that right was confirmed, it could not be whittled down or taken away unless by express provisions or by necessary implication. Tribunal had concluded as under: "2. entire provisions of s. 144B are meant to be procedural in character in regard to making of assessment and they have nothing to do with right of assessee either to file appeal or agitate matter against assessment in any forum as envisaged under law. It is only step in process of making assessment. Sec. 144B(3) contains two parts. first one deals with case where no objections are received and second deals with case where assessee intimates acceptance of variation proposed by ITO. Had assessee accepted assessment under second limb of s. 144B(3), it might have lost its right of appeal, but mere omission to file objections under first limb of that section would not mean that assessee had accepted variation. consequence of two different situations contemplated under sub-s. (3) of s. 144B are not similar identical. consequence in case of first part is totally different from consequence that arise from second part. In second part there is positive acceptance or agreement to proposed assessment, whereas in first part there is silence on part of assessee. Silence cannot be construed as positive acceptance especially in construing fiscal laws. Accordingly by merely not filing objections to draft assessment order, it could not be said that assessee is deemed to have accepted assessment." Respectfully following above stated decision, we hold in present appeals that CIT (A) was not justified in giving finding that appeals filed by assessee were not maintainable on ground that assessee had failed to raise any objections to draft assessment orders. CIT(A) had relied on decision of Allahabad High Court in case of Sterling Machine Tools vs. CIT (1980) 123 ITR 181 (All). In that case, one of partners of assessee firm had agreed to income computed by taking cost as worked out by exports. It was in those circumstances that it was held that no appeal lay against assessment relating to addition made on that basis. ratio of that decision will not apply in instant case, as facts of instant case are different. assessee's not raising objections to proposed order of assessment does not amount to assessees agreeing to proposed addition. In facts of instant case, decision of Tribunal in Sippy's case will become applicable. We hence restore appeals to CIT(A) and direct him to decide on various grounds of appeal taken by assessee in its appeals for assessment years. appeal for asst. yr. 1979-80 is partly allowed. For statistical purposes appeals for asst. yrs. 1980-81 to 1982-83 are allowed. *** BHARAT STRAWBOARD & PAPER MILLS (P) LTD. v. INCOME TAX OFFICER
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