2017 (8) TMI 126 - HC - Income Tax

Monetary limit prescribed under sub-section (3) of section 255 - maintainability of appeal - MAT applicability - Held that - Legislature has used the term computed in contradistinction to the word assessed in sub-section (3) of section 255 of the Act. In the present case the income of the assessee was assessed by the Assessing Officer at 12, 74, 720 but was computed under the MAT provisions at 96, 28, 336 under section 115JB of the Act which was much above the limit prescribed under sub-section (3) of section 255 of the Act. The appeal was decided on June 1 2016 on which date the limit for hearing appeal by learned single Member of the Tribunal would be taken at 50, 00, 000 as the amended provision of sub-section (3) of section 255 of the Act by the Finance Act 2016 was made operative from June 1 2016 itself. In view of the above provision of law the impugned order dated June 1 2016 annexure P.3 passed by the Tribunal whereby the single Member had heard the appeal in both the appeals is set aside and the matter is remanded to the Tribunal to decide it afresh after hearing the parties in accordance with law. The appeals shall be heard by a Division Bench of the Tribunal in accordance with sub-section (2) of section 255 of the Act.

Summary

Issues:
1. Condonation of delay in refiling the appeal
2. Permission to make good the deficiency in court fee
3. Interpretation of provisions of section 115JB of the Income-tax Act, 1961
4. Jurisdiction of the Tribunal in hearing and deciding the case
5. Applicability of the provisions of section 255 of the Act regarding the composition of the Tribunal Bench based on the total income of the assessee

Issue 1: Condonation of delay in refiling the appeal

The delay in refiling the appeal was condoned by the court, and the relevant CM was disposed of accordingly.

Issue 2: Permission to make good the deficiency in court fee

The appellant was permitted to rectify the deficiency in court fee, and the relevant CM was disposed of by the court.

Issue 3: Interpretation of provisions of section 115JB of the Income-tax Act, 1961

The appellant-assessee challenged the order of the Tribunal under section 260A of the Income-tax Act, 1961, regarding the applicability of section 115JB(6) and the restrictive interpretation given by the Tribunal. The appellant claimed that the provisions of section 115JB were not applicable to them based on certain criteria. The court examined the facts and circumstances of the case, including the computation of income under the Minimum Alternate Tax (MAT) provisions and the rejection of the appellant's claim by the Assessing Officer. The court remanded the matter to the Tribunal for fresh consideration.

Issue 4: Jurisdiction of the Tribunal in hearing and deciding the case

The appellant argued that the Tribunal erred in hearing the case with a single member instead of a Division Bench as required by section 255(3) of the Act due to the income computed under MAT exceeding the specified limit. The court analyzed the legislative history of the monetary limit prescribed under section 255(3) and found that the appeal should have been heard by a Division Bench based on the computed income exceeding the limit. Consequently, the court set aside the Tribunal's order and remanded the matter to be heard by a Division Bench.

Issue 5: Applicability of the provisions of section 255 of the Act regarding the composition of the Tribunal Bench based on the total income of the assessee

The court referred to section 255 of the Act, highlighting the provisions related to the constitution of Benches based on the total income of the assessee. The court noted the amendments to the monetary limit over the years and emphasized the distinction between "computed" and "assessed" income. Based on the computed income under MAT exceeding the prescribed limit, the court directed the matter to be heard by a Division Bench in accordance with the provisions of section 255(3) of the Act.

In conclusion, the judgment addressed various issues such as the condonation of delay, deficiency in court fee, interpretation of tax provisions, jurisdiction of the Tribunal, and the composition of the Bench based on the total income of the assessee. The court provided detailed analysis and legal reasoning for each issue, ultimately remanding the matter for fresh consideration by a Division Bench of the Tribunal.