COMMISSIONER OF INCOME TAX Vs. SUSHIL THOMAS ABRAHAM

JUDGEMENT

(1.) The Revenue is in appeal before this Court against the order of the Income Tax Appellate Tribunal (Annexure-J). At the outset we have to notice the chequered path taken by the assessment for assessment year 1996-97. The assessee was a contractor who was engaged in building works. In the previous year of the assessment year 1996-97, the assessee had undertaken works at the sites of Skyline Builders. There arose disputes with the Skyline Builders which led to the assessee filing a suit claiming certain amounts. Since disputes were pending, the assessee did not file return of income for the assessment year. A search was conducted under Section 133A of the Income Tax Act, 1961 ('Act', for short) in the business premises on 24.9.1996 and since no return of income was filed within the stipulated date of 31.8.1996, notice under Section 142(1) of the Act was issued. The assessee filed a return disclosing an income of Rs.6,08,680/- but without making payment of the admitted tax. The explanation of the assessee was that the amounts have not reached the hands of the assessee for reason of the claims still pending before the Civil Court. The Assessing Officer, however, went ahead and after examining the books of accounts passed an assessment order at Annexure-B computing total income at Rs.25,95,260/-.

(2.) An appeal was filed before the Commissioner of Income Tax (Appeals) which was rejected as per Annexure-C, finding that the assessee had not paid the admitted tax under Section 140A. An appeal could not have been maintained without payment of admitted tax. The assessee filed a second appeal before the Tribunal in which there was a remand made as per Annexure-D. In Annexure-D, the Tribunal found that the Assessing Officer had relied on the claim made by the assessee against Skyline Builders to estimate the higher income. Since the disputes between Skyline Builders and the assessee were yet to be resolved, there was a direction to the Assessing Officer to re-do the assessment, without looking into the claims filed against Skyline Builders. An Income Tax Appeal was filed by the Revenue before this Court as ITA No.91/2007.

(3.) In the meanwhile, the assessee had approached this Court with WP(C) No.28277/2004 against proceedings initiated for recovery of admitted tax. The said Writ Petition was pending here for four years. On 23.7.2008, that Writ Petition was dismissed as per Annexure-F judgment. By that time, the appellate order at Annexure-D dated 4.11.2003 was passed. Since the Tribunal's order was produced before the learned Single Judge, the learned Single Judge invoked Article 227 of the Constitution of India and set aside the Tribunal's order finding that it is non est in law. Despite that, the learned Single Judge granted time to the assessee to pay the admitted tax, upon which the Commissioner of Income Tax (Appeals) was also directed to re-consider the issue.