2016 (10) TMI 975 - HC - Income Tax

Income on protective assessment - Held that - As conceded by the learned counsel for the parties that substantive assessment has since been made in respect of the income assessed by way of protective assessment as income in the hands of Dipesh Chandak. Therefore, we do not find any substantial question of law arises in respect of protective income as assessed by the Assessing Officer. However, if the substantive assessment is set aside in Appeal or otherwise, revenue would have liberty to seek revival of the present proceedings. The remaining amount of ₹ 15,45,000/-, which is the subject matter of appeal, is less than the monetary limit in respect of which the revenue has decided not to dispute the assessment in terms of Central Board of Direct Taxes Circular No. 21 of 2015 dated 10th December, 2015.

Issues Involved:
Assessment based on protective income, validity of substantive assessment, monetary limit for dispute by revenue, deletion of remaining income in appeal.

Assessment based on protective income:
The case involved an appeal under Section 260A of the Income Tax Act, 1961, stemming from an order by the Income Tax Appellate Tribunal. The Assessing Officer had assessed the assessee's liability to pay tax on an income of ?3,52,35,130, which included protective income of ?3,33,54,503. Subsequently, the Commissioner of Income Tax (Appeal) set aside the income on protective assessment, a decision upheld by the Income Tax Appellate Tribunal. The court noted that the substantive assessment had been made regarding the income assessed as protective income, eliminating the need to address any substantial question of law regarding the protective assessment. However, it was mentioned that if the substantive assessment were to be set aside in the future, the revenue would have the right to seek revival of the proceedings.

Validity of substantive assessment:
The court acknowledged that the substantive assessment had been conducted concerning the income initially assessed as protective income in the hands of Dipesh Chandak. This acknowledgment led to the conclusion that no substantial question of law arose concerning the protective income assessment. The judgment highlighted that if the substantive assessment were to be invalidated in an appeal or through other means, the revenue would retain the liberty to pursue the revival of the proceedings.

Monetary limit for dispute by revenue:
A portion of the total assessed amount, specifically ?15,45,000, was the subject matter of the appeal. Notably, this amount fell below the monetary limit established by the revenue for disputing assessments, as outlined in Circular No. 21 of 2015 issued by the Central Board of Direct Taxes on 10th December 2015. Since the remaining amount was below the threshold for dispute set by the revenue, the court did not adjudicate on the deletion of this income in the context of the present appeal, ultimately resulting in the dismissal of the appeal.

Deletion of remaining income in appeal:
The court emphasized that since the remaining amount under dispute was below the threshold specified by the revenue for raising disputes, the question of deleting this income was not addressed in the appeal. Consequently, the court dismissed the appeal based on this consideration.

This comprehensive analysis of the judgment from the Patna High Court covers the issues related to assessment based on protective income, the validity of substantive assessment, the monetary limit for disputes by the revenue, and the deletion of remaining income in the appeal, providing a detailed understanding of the court's decision and the legal implications involved in the case.

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