2019 (6) TMI 149 - HC - Income Tax

Monetary limit - Low tax effect - HELD THAT - The appellant who has filed a copy of letter received from the Income Tax Department, Aayakar Bhawan, Panchkula showing that the tax effect is less than ₹ 50,000,00/-. Appellant-revenue states that since the tax effect involved is ₹ 44,67,837/-, he has instructions to withdraw the present appeal in view of circular No. 03/2018, dated 11. 07. 2018 issued by ITA-178-2016 Board of Direct Taxes, New Delhi. However, he has prayed that liberty be granted to the revenue to file an application for revival of the appeal, in case something survives therein. Dismissed as withdrawn with liberty as prayed for. It is, however, clarified that withdrawal of the appeal by the revenue shall not be taken to be affirmation of order of the Tribunal on merits.

Summary

Issues:
1. Appeal filed by revenue under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal.
2. Questions of law regarding the validity of proceedings under Section 147 of the Income Tax Act.
3. Acceptance of the appeal by the Assessee without challenging the Reopening, Report of the DVO, and Valuation.
4. Whether the order passed by the Income Tax Appellate Tribunal is against the law and overlooks material available on record.
5. Withdrawal of the appeal by the revenue due to the tax effect being less than the prescribed limit.

Analysis:
1. The appeal was filed by the revenue under Section 260A of the Income Tax Act against the order of the Income Tax Appellate Tribunal for the assessment year 2008-09. The substantial questions of law raised by the revenue included the validity of proceedings under Section 147 of the Income Tax Act. The revenue questioned the justification for reopening the assessment and the acceptance of the appeal by the Assessee without challenging certain aspects.

2. The revenue raised concerns about the proceedings under Section 147, arguing that there was no tangible material to support the reopening of the assessment. They highlighted the issue of using the same value for calculating capital gains in the case of a co-owner, questioning the legality of the proceedings based on this premise.

3. Another point of contention was the acceptance of the appeal by the Assessee without challenging the Reopening, Report of the DVO, and Valuation adopted in the case of the Co-owner. The revenue argued that the Assessee participated in the proceedings without contesting these crucial aspects, which raised questions about the validity of the appeal.

4. The revenue further contended that the order passed by the Income Tax Appellate Tribunal was against the law and overlooked the material available on record. They claimed that the Tribunal's decision was perverse in nature and did not consider the scheme of the Income Tax Act, 1961, and the evidence presented during the proceedings.

5. Ultimately, the revenue decided to withdraw the appeal due to the tax effect being less than the prescribed limit. The appeal was dismissed as withdrawn, with the revenue granted liberty to file an application for revival if necessary. It was clarified that the withdrawal of the appeal did not signify affirmation of the Tribunal's order on merits, leaving the legal issue raised by the revenue open for adjudication in a suitable case.