ORDER
Miss Moksh Mahajan, A.M.
These four appeals filed by the assessee and four cross objections filed by the revenue are dealt with together as these contain common issues. They are disposed of by a single order for the sake of convenience.
2. The facts in brief are that the Income Tax Officer (TDS) Dehradun passed an order under section 206C of the Income Tax Act (hereinafter referred to as `the Act_on 12-6-1996 for the assessment years 1991-92 to 1994-95. The tax liability raised was at Rs. 2,24,72,801 (total). The assessee filed appeal and the Commissioner (Appeals) Dehradun vide orders dated 29-11-1996 confirmed the order of the Income Tax Officer (TDS) Dehradun dismissing the appeal. Against the aforesaid order, the assessee filed appeals before the Tribunal for the concerned assessment years. In the meanwhile the Income Tax Officer (TDS) Dehradun moved an application under section 154 of the Act on10-4-1997 before the Commissioner (Appeals) Dehradun, contending that a mistake has occurred at the end of learned Commissioner (Appeals) in entertaining the appeals under section 246 of the Act. As no appeal lies against the order passed under section 206C of the Act, needs to be rectified. The learned Commissioner (Appeals) accepting the contention held in para 4 of his order that as no appeal lies against the order passed under section 206C of the Act, there being a legal mistake apparent in the section 206C of the Act, there being a legal mistake apparent in the appellate order dated 29-11-1996 in A. No. 120/DDN/95-96 passed in the case of the assessee, the same needs to be rectified. He accordingly rectified the aforesaid order by substituting what was said in paras 2 to 9 of the order to the effect that the appeal being incompetent is to be dismissed in limine.
3. On the above facts, the learned Authorised Representative Shri O.S. Bajpai advanced detailed arguments which were also reduced in writing as well. It was submitted that the question whether the Commissioner (Appeals) has the jurisdiction under section 246 of the Act to hear an appeal against an order under section 206C of the Act, is a highly debatable issue. It involves a long-drawn process of arguments and reasoning. It also requires interpretation of various provisions of law. By way of elaboration it was submitted that while this involves interpretation of various provisions of sections namely 246, 248, 206C, 44AC, sections 4, 5, & 2(7) of the this cannot be done without resorting to a long-drawn process of reasoning and lengthy debate. Various case laws have to be considered before applicability of the provisions to the facts of the present case could be decided. There being possibility of two plausible views on the issue, the same is not covered under section 154 of the Act. Under section 154 of the Act, it is only a mistake apparent from record which is to be rectified. The section does not provide for the review of the order passed earlier. The mistake is to be an obvious, patent, glaring and self-evident one before it could be covered under the aforesaid section. In support reliance was placed on the following decisions:-
T.S. Balaram, ITO v. Volkart Bros. (1971) 82 ITR 50 (SC);
Volkart Bros. v. ITO (1967) 65 ITR 179 (Bom);
CIT v. Delhi Cement Stockists (1971) 81 ITR 515 (Del);
V.R. Sonti v. CIT (1979) 117 ITR 838 (Cal);
Addl. CIT v. Motors & General Finance Ltd. (1983) 142 (ITR 424 (Del);
CIT v. Bhawani Prasad Girdhari Lal & Co. (1991) 187 ITR 257 (All);
CIT v. Indian Steel & Writ Products Ltd. (1991) 192 ITR 252 Cal);
CIT v. Bhima Bros. (1995) 214 ITR 302 (Ker);
CIT v. E.I.D. Parry Ltd. (1995) 216 ITR 489 (Mad);
CIT v. Lakshmi Prasad Lahkar (1996) 220 ITR 100 (Gau);
CIT v. Rajesh Talkies (1996) 220 ITR 107 (P&H);
Bhure Mal Raj Mal v. CIT (1996) 220 ITR 636 (Raj); and
CIT v. Motor & General Finance Ltd. (1997) 227 ITR 843 (Del).
In regard to competence of Commissioner (Appeals) to hear an appeal under section 246 against an order under section 206C(6) & (7) of the Act, the following decisions were referred to:
CIT v. Khemchand Ram Das (1938) 6 ITR 414 (PC);
S.M. Modi v. CIT (1958) 33 ITR 529 (Bom); and
CIT v. Ashoka Engg. Co. (1992) 194 ITR 645 (SC).
The words the assessee denying his liability to be assessed in this Act, as used in section 246 of the Act have to be interpreted on the basis of facts and circumstances of the case. This apart, the Commissioner (Appeals) exercised his jurisdiction under section 246 consciously and having dismissed the appeal on merits same cannot be dismissed again on another ground reviewing his earlier order under section 154 of the Act. Having acquiesced with the jurisdictional fact in the appellate proceedings and having represented the matter before the learned Commissioner (Appeals) in due course, without raising any objection as to his competence to hear the appeal, it is not permissible to do so specifically when the matter was pending before the Income Tax Appellate Tribuanl. According to the learned Authorised Representative the order under section 154 of the Act should have an effect of either enhancing or reducing an assessment in terms of sub-sections (3) and (6) thereof, which is not so in the case of the assessee. The Commissioner (Appeals) cannot treat the order passed under section 206C differently for the purposes of section 154 and that of section 246 of the Act.
4. Shri S.K. Srivastava who appeared on behalf of the department, very ably and effectively put a defence against the arguments as advanced. This is appreciable in view of the order of the learned Commissioner (Appeals) being bereft of any reasons. As per his submissions, no appeal lies against the order passed under section 206C of the Act read with sub-sections (6) & (7) and as such the learned Commissioner (Appeals) rightly modified his earlier order under section 154 of the Act. The Distinct Excise & Taxation Officer (DETO) in short is only a person collecting purchase price and making the part of payment to the government. It is not an assessee under section 246(1)(a), read with section 2(7) of the Act. The analogous provisions are contained in section 226(3) of the Act. Then no liability has been fastened on the DETO which could have been denied by him. The assessee has neither objected to the amount of income assessed or to the amount of tax determined or the amount of loss computed or the status under which he is assessed so as to come within the purview of section 246(1)(a) of the Act. Order under sections 206C(6) & (7) has not been specifically made appealable under section 246 of the Act. The intention of the Legislature is clear from the fact that a separate appeal has been provided against an order passed under section 201 of the Act. If it was so required, the same would have been the case in respect of an order passed under section 206C of the Act. Chapter XVII of the Income Tax Act relates to collections and recovery and the aforesaid section falls under Chapter XVIIBB. This is certainly no pari materia with the provisions of deduction of tax at source. As to the remedy of appeal, the probable course open for the party is by way of writs before the courts as would be evident from the decisions rendered in the cases of State of Bihar v. CIT (1993) 202 ITR 535 (Pat), and Ramjee Prasad Sahu v. Union of India (1993) 202 ITR 800 (Pat). The decisions of the Honble Supreme Court in the case of Central Provinces Manganese Ore Co. Ltd. v. CIT (1986) 160 ITR 961 (SC) as relied upon by the assessee is distinguishable. There it is the assessee on whom the liability has been fastened which is denied by it. The mistake is that of law which is curable under section 154 of the Act. Reliance was placed on the following decisions:
India Woollen Textile Mills (P) Ltd. v. CIT (1978) 111 ITR 205 (P&H);
Addl. CIT v. District Co-operative Bank Ltd. (1979) 119 ITR 142 (All);
Addl. CIT v. India Tin Industries (P) Ltd. (1987) 166 ITR 454 128 (Karn);
Sarangpur Cotton Mfg. Co. Ltd. v. CIT (1985) 152 ITR 251(Guj);
T.S. Rajam v. CED (1968) 69 ITR 342 (Mad);
Blue Star Engg. Co. (Bombay) (P) Ltd. v. CIT (1969) 73 ITR 283 (Bom);
R.A. Boga v. AAC (1977) 110 ITR 1 (P&H);
CIT v. Peirce Leslie & Co. Ltd. (1997) 227 ITR 759 (Mad);
P. Kutty Krishnan Nair CIT (1961) 41 ITR 597 (Ker);
The decisions relied upon by the learned Authorised Representative are distinguishable on the facts of the cases. The provisions of sections 154 and 154(1A) of the Act are clearly applicable and hence the order passed by the learned Commissioner (Appeals) is justified.
5. Reacting to the submissions of the learned Departmental Representative it was submitted by Shri O.S. Bajpai that the following decisions cited by the learned Departmental Representative are distinguishable :-
India Woollen Textile Mills (P) Ltd.s case (supra)
District Co-operative Bank Ltd.s case (supra)
India Tin Industries (P) Ltd.s case (supra)
The provisions of section 154(1A) of the Act are not applicable in the case of the assessee.
6. We have carefully considered the rival submissions, we have also gone through the decisions as cited. The operative part of section 154 of the Act reads as under:-
“154(1). With a view to rectify any mistake apparent from the record an income-tax authority referred to it in section 116 may,
(a) amend any order passed by it under the provisions of this Act;
(b) amend any intimation sent by it under sub-section (1) of section 143, or enhance or reduce the amount of refund granted by it under that sub-section;
1A. Where any matter has been considered and decided in any proceeding by way of appeal or revision relating to an order referred to in sub-section (1), the authority passing such order may, notwithstanding anything contained in any law for the time being in force, amend the order under that sub-section in relation to any matter other than the matter which has been so considered and decided.
(2) Subject to the other provisions of this section, the authority concerned/
(a) may make an amendment under sub-section (1) of its own motion, and
(b) shall make such amendment for rectifying any such mistake which has been brought to its notice by the assessee, and where the authority concerned is the Deputy Commissioner (Appeals) or the Commissioner (Appeals), by the assessing officer also.”
The expression mistake has not been defined in the Act. In the ordinary parlance it is understood to be synonymous with an error. The meaning of mistake as given in the Chambers Concise Dictionary, Deluxe Edition (Chief Editor Cather in Schwarz), is as under:
“to think or understand wrongly; to take for another thing or person; to be wrong about.”
One of the meanings given for the word Mistake in Venkataramaiyas Law Lexicon & Legal Maxims (2nd Edition) at p. 1526 is as under:
“Mistake A mistake is an omission made not be design, but by mischance (Sandford v. Beal, 6 L.J. Q.B. 73) and a “mistake apparent” is a mistake that is manifest, plain or obvious, a mistake that can be realised without a debate or a dissertation. [M. Kumaran v. First Addl. ITO (1958) 33 ITR 290 at p. 293 (Ker)].”
The expression apparent on the other hand refers to something which is obvious, conspicuous and self-evident. Accordingly mistake apparent from records would necessarily mean obvious error which is incapable or argument or debate. This, however, would not exclude complex matter as held by their Lordship of Madras High Court in the case of T.S. Rajams case (supra). Mistake can be both of fact and law. In case of latter, where an order is plainly inconsistent with the clear provisions of the Statute, it can be said that there is some mistake apparent from the record.
7. This in short is what the provisions of section 154 of the Act convey Mistake in question as argued on both sides is whether order passed under section 206C of the Act is appealable or not.
8. Recalling facts in brief, the Income Tax Officer (TDS) Dehradun found that the District Excise Officer had not collected tax on basic fee (issue price) on sale of alcoholic liquors for human consumption (Other than Indian made foreign liquors). This was as stated in the order dated 12-6-1996. After procuring the explanation of the party in detail, he held that the District Excise Officer had failed to collect tax at source and to pay it to the credit of the Central Government within the time prescribed under section 206C of the Act. After holding the district Excise Officer to be an assessee in default it was ordered that tax as well the interest on the same is required to be collected at his end.
9. The District Excise & Taxation Officer (hereinafter referred to as `the DETO) in turn filed an appeal before the learned Commissioner (Appeals) contending that the licence fee forming part of bid money was neither in any way related to nor form part of purchase price of liquor, it was government levy for exclusive right to regulate trading in a country liquor in a particular area. There was no statutory liability for deduction of tax at source on such basic licence fee. The Income Tax Officer was wrong to hold that the appellant was seller and that the basic licence fee was related to and formed part of purchase price. The appellant was not a person liable to pay tax under section 206C of the Act. The DETO was not responsible for collecting-tax at source under section 206C of the Act and as such the collection of amount and the levy of interest was not justified. These in short were the contentions raised in six grounds of appeals before the learned Commissioner (Appeals), Dehradun. The learned Commissioner (Appeals) after hearing the party dismissed the appeal on all the grounds. This was vide his order dated 29-11- 1996. This order was subsequently cancelled under section 154 of the Act on the ground what no appeal lay against the order passed under section 206C of the Act.
10. On the facts as stated above, could it be said that there was an obvious mistake in admitting an appeal and deciding it on merit which needed to be rectified under section 154 of the Act. Reference made to the provision of section 246 of the Act reveals that it specifically enumerates the order which is appealable to the first appellate authority. Sub-section (1)(a) provides for an appeal in case of an order against the assessee who denies his liability to be assessed or order of assessment under sub-section (3) of section 143 or section 144, where the assessee objects to the amount of income assessed or to the amount of tax determined, or to the amount of loss computed, or to the status under which he is assessed. Section 206C has been expressly omitted from section 246 of the Act but sections 139(8) and 215 of the Act also find no place in the section 246 of the Act. In case of latter it has been held by their Lordships of Honble Supreme Court in the case of Central Provinces Manganese Ore Co. Ltd. case (supra), that the appeal lies where the assessee denies his liability for levy of the interest. Thus non-mention of section by itself would not deprive the assessee from right of appeal in case, it is found covered under some other clause of the section. Then while the view that the DETO is not an assessee in its strict sense of the term as contemplated in section 246(1)(a) of the Act cannot be summarily dismissed as frivolous, it is also a fact that the DETO has been treated as an assessee in default by the Income Tax Officer himself which category in such is covered under section 2(7)(c) of the Act. The aforesaid provisions in turn read as under:-
“(c) every person who is deemed to be an assessee in default under any provision of this Act.”
Further more whether the order of the assessing officer in directing the Excise & Taxation Officer to pay the tax is not the one passed during the course of proceedings taken under the Act is another factor which is to be considered. This aspect is to be examined in the light of the observations of the Hon’ble Privy Council in the case of Khemchand Ram Das (supra), which runs as under:
‘The assessment as used in Income Tax Act means sometimes the computation of income, sometimes the determination of the amount of the tax payable and sometimes the procedure laid down in the Act for imposing liability upon the tax payer.”
Can the collection of tax from the District Excise & Taxation Officer be considered under the expression ‘determination of the amount of the tax payable. Or procedure laid down in the Act for imposition of liability. In the face of demand created on District Excise & Taxation Officer could it be said no liability has been fastened on him specially when he has been asked to pay interest in addition. This has also been so understood by the District Excise & Taxation Officer who has denied this liability in an appeal filed before the Commissioner (Appeals). As regards the argument that since section finds its place under the head “Collection & recovery”, the same is not appealable, one would ask one self the question as to whether there could be any collection without deduction. On the other hand it cannot be denied that in certain respects the provisions of section 206C can be compared with those of section 226 of the Act as is the contention of the learned Departmental Representative Section 206C then makes use of various terms namely `seller who is required to collect tax and the buyer who obtains in any sale by way of auction, tender or any other modes, goods from the seller. The interpretation of the expressions ‘buyer’, ‘seller’, ‘sale’, ‘auction’, ‘tender’, ‘goods’, may come up for interpretation before the authorities. Could it be said that in such a situation it is the final word of the IncomeTax Officer and the party in question has no remedy whatsoever. In the case of Ashoka Engg. Co. (supra) it has been held by their Lordships of the Hon’ble Supreme Court that there is no inherent right of appeal to the assessee. This has to be spelt from the words of the statute if any, providing for an appeal. But it is an equally well settled proposition of law that if there is a provisions conferring a right of appeal, it should be read in a reasonable practical and liberal manner. The latter would depend on the facts and circumstances of the case.
11.1 There are no two opinions on the subject that “overlooking of mandatory provision of law which leaves no option or discretion with the taxing authority would amount to mistake apparent on the face of record.” This is as held in the cases of India Woollen Textile Mills (P.) Ltd (supra), District Co-operative Bank Ltd’s (supra), India Tin Industries (P.) Ltd. (supra). Question is whether there has been an overlooking of mandatory provisions of law which could be covered under section 154(IA) of the Act. This needs to be determined.
11.2 No doubt the provisions of section 206C of the Act are peculiar in their nature. It is also fact that the provisions have been questioned by way of filing of writs as were in the cases cited by the learned Departmental Representative but that by itself would not clinch the issue either way in regard to the right of appeal.
12. In the above background is it the intention of the Legislature that no appeal is maintainable against the order passed under section 206C of the Act or not. The issue is to be examined in the light of remedy available if any, to the party on whom the liability of collection of tax on behalf of the third party is fastened. These are a few questions which need to be answered for deciding whether an appeal lies against order, passed under section 206C of the Act or not. To come to the conclusion, one way or the other, would be though long drawn process of arguments. Arguments as advanced on both sides have to be considered carefully on the light of the provision before coming to the final conclusion. In the circumstances, in our considered view there is no obvious or clear mistake of law which could have been rectified by the learned Commissioner (Appeals) under section 154 of the Act. After having decided the appeal on merits, he could not have set aside the order on perfunctory ground that no appeal lay against the order under section 206C of the Act.
13. Coming to the various decisions relied upon on both sides, we find that most of them are on the subject as to what constitutes mistake apparent from record. The gist of the same has been extracted by us in our discussion as contained above and as such we need not refer to them individually in detail. Suffice to say that we have gone through all the decisions as placed before us on both sides. In the result, the order of the learned Commissioner (Appeals) passed under section 154 of the Act, is set aside.
14. The cross objections filed by the revenue having become infructuous in view of our order in appeals, are dismissed.
15. In the result, all the appeals are allowed whereas the cross objections filed by the revenue are dismissed.