2020 (10) TMI 313 - HC - Wealth-tax

Maintainability of appeal - limit fixed by the CBDT for the revenue to pursue the appeals - HELD THAT - Substantial questions of law have to be answered against the revenue, in the light of the Circular issued by Central Board Direct Taxes for brevity, 'CBDT' bearing Circular No.5/2019 dated 05.02.2019. Whether Tribunal erred in dismissing the appeals on the ground of law tax effect without taking note of the fact that the revenue audit objection is there in the assessee's case and therefore, the cases would come within the exemption culled out in the circular? - It is not clear what is the revenue audit objection in the instant matter. Nevertheless, we have heard the learned counsel for the parties on the merits of the matter. The issue pertains to valuation of a property in Neelankarai village. The assessee contended that the property falls within the high tide zone and in the terms of the coastal zone regulations, the property cannot be put to use for the purpose of constructing any building there on and even if an application is made to the local planning authority / local body, the same will be rejected, as the planning authorities have no jurisdiction to deal with any application for grant of planning permission on a land, which falls within CRZ limits. No question of law arises for consideration in the instant cases and therefore, we are not inclined to entertain the appeals filed by the revenue. As mentioned above, the substantial question of law no.3 raised by the revenue is, stating that the Tribunal ought not to have rejected the revenue's appeal on the ground of low tax effect, without noting the revenue audit objection. Since we have decided in favour of the assessee on merits, substantial question of law no.3 does not arise for consideration.

Summary

Issues:
Challenging common order passed by ITAT for Assessment Years 2005-2006, 2006-2007, and 2007-2008 under Wealth Tax Act, 1957.

Analysis:
The High Court of Madras heard appeals filed by the revenue challenging the ITAT's order. The substantial questions of law raised included the applicability of CBDT Circulars, specifically Circular No.5/2019. The Court noted that the Circular extended monetary limits for filing appeals in Income Tax cases to Wealth Tax appeals from 05.02.2019. As a result, substantial questions of law 1 and 2 were answered against the revenue, as the threshold limit was made applicable to Wealth Tax Appeals. The revenue's argument regarding revenue audit objection was considered, but the Court found no merit in it due to the factual findings related to the property valuation issue.

The issue in question pertained to the valuation of a property in Neelankarai village, concerning whether it falls within the high tide zone and coastal zone regulations. The CITA supported the assessee's position, stating that the land was unbuildable under current laws and thus not considered an asset under the Wealth Tax Act. The CITA's decision was based on factual findings that the land fell within the prohibited zone CRZ III category, aligning with a previous court decision. Consequently, the Court found no legal question for consideration in the cases and dismissed the appeals filed by the revenue. Substantial question of law no.3, regarding the rejection of the revenue's appeal based on low tax effect without considering the revenue audit objection, was deemed unnecessary given the decision in favor of the assessee on merit.

In conclusion, the High Court dismissed the revenue's appeals, answered substantial questions of law 1 and 2 against the revenue, and held substantial question of law no.3 as unnecessary in the given circumstances. The connected miscellaneous petitions were closed with no costs awarded.