2010 (10) TMI 118 - HC - Income Tax

Demand of tax - income was assessed to Rs. 4,73,783.00 and on the basis of the same a tax of Rs.2,26,774.00 was demanded - Aggrieved by the order, the respondent filed an appeal - Held that - order of Tribunal reveals that it has not given exact amount of tax involved in the appeal - matter is remanded back to the Tribunal - The tribunal is directed to decide whether the total amount of tax involves is less or more than Rs. two lacs and in case it is not less than two lacs, then the case may be decided on merits - Appeal is allowed

Summary

Issues:
Assessment of income for the year 1999-2000, appeal against assessment order, deletion of addition by CITA, dismissal of appeal by Tribunal based on circular, determination of tax amount involved.

Analysis:
The assessing officer had initially assessed the respondent's income for the assessment year 1999-2000 at Rs. 4,73,783.00, resulting in a tax demand of Rs. 2,26,774.00. Subsequently, the respondent appealed against this order, leading to the Commissioner Income Tax (Appeal) (CITA) allowing the appeal on 27.12.2006 by deleting the addition of Rs. ten lacs. This decision by the CITA was pivotal in the case as it significantly impacted the tax liability of the respondent.

The department, dissatisfied with the CITA's decision, filed an appeal before the Tribunal seeking a review. However, the Tribunal did not delve into the merits of the case but instead dismissed the appeal on 6.11.2008 based on a circular issued by the Central Board of Direct Tax (the Board) which stated that the tax involved was less than two lacs. This dismissal raised concerns regarding the proper assessment of the tax amount involved in the case.

Upon review, the High Court observed that the tax assessed by the assessing officer was Rs. 2,26,774.00, and the deletion of the addition of Rs. ten lacs by the CITA could potentially result in no tax being paid by the respondent. This led the court to conclude that the total tax amount involved before the Tribunal might not be less than two lacs, contrary to the Tribunal's decision. The High Court, therefore, allowed the appeal, set aside the Tribunal's order, and remanded the matter back to the Tribunal for a proper determination of the tax amount involved.

In its final directive, the High Court instructed the Tribunal to ascertain whether the total tax amount involved exceeded Rs. two lacs. If it did, the Tribunal was directed to proceed with a decision on the merits of the case. The parties were scheduled to appear before the Tribunal on a specified date for further proceedings in accordance with the law. This comprehensive analysis by the High Court highlights the importance of accurately determining the tax amount involved in appeals to ensure fair and just outcomes in tax matters.