2023 (8) TMI 958 - AT - Income Tax

Maintainability of an appeal against the order passed u/ sec. 139(9) before the CIT(A) u/ sec. 246A - HELD THAT - We find that sec. 246A is a self-exhaustive provision providing remedy of an appeal against the orders passed by lower authority(ies) in various clauses from (a) to (r) followed by Explanation(s) and statutory proviso(s); as the case may be. Learned counsel could not pin-point any appeal provision therein against sec. 139(9) order. That being the case, we are of the considered opinion that only stricter interpretation in such an instance has to be adopted in light of landmark decision in Commissioner of Customs (Imports), Mumbai vs. M/s. Dilip Kumar And Co. Ors. 2018 (7) TMI 1826 - SUPREME COURT The assessee s arguments based on sec. 246(1)(a)(i) are found to be devoid of any merit as the above quoted statutory expression (supra) comes into play only when the concerned taxpayer denies his liability to be assessed under this Act which is not the case before us once we are dealing with an issue of validity of a return only. We observe in these peculiar facts that sec. 246A envisages an appellate remedy before the CIT(A) not based on various consequences faced by an assessee or by way of necessary implications but as per various orders passed by the field authorities under the specified statutory provisions only. So far as the assessee s reliance on learned coordinate bench foregoing decision (supra) is concerned, we hold the same to be per inquirium only since not adopting stricter interpretation in above terms. Case law CIT vs. B.R. Constructions 1992 (6) TMI 13 - ANDHRA PRADESH HIGH COURT holds that a judicial decision ceases to be a binding precedent in such a factual backdrop. We accordingly uphold the CIT(A)'s action rejecting the assessee s lower appeal against sec. 139(9) order as not maintainable u/ sec. 246A - Assessee appeal dismissed.

Summary

Issues Involved:
1. Maintainability of appeal against the order passed under section 139(9) of the Income Tax Act, 1961.
2. Validity of treating the return filed by the assessee as defective under section 139(9).

Summary of Judgment:

Issue 1: Maintainability of Appeal Against Section 139(9) Order
The primary issue in this case was whether an appeal against an order passed under section 139(9) of the Income Tax Act, 1961, is maintainable under section 246A of the Act. The CIT(A) had refused to admit the appeal on the grounds that section 246A does not explicitly provide for an appeal against an order under section 139(9).

The assessee argued that section 246A(1)(a) allows for an appeal "against the assessee where the assessee denies his liability to be assessed under this Act," and referenced a precedent case (Deere & Company vs. DCIT) to support their position. However, the Tribunal found no merit in this argument, stating that section 246A is a self-exhaustive provision and does not include any clause for an appeal against a section 139(9) order. The Tribunal upheld the CIT(A)'s decision, citing the Supreme Court's ruling in Commissioner of Customs (Imports), Mumbai vs. M/s. Dilip Kumar And Co. & Ors., which mandates a stricter interpretation of such provisions.

Issue 2: Validity of Treating the Return as Defective
The Tribunal also addressed the validity of treating the return filed by the assessee as defective under section 139(9). The assessee contended that their gross receipts were less than Rs.1 Cr, and thus, they were not liable to get their books audited under section 44AB, making their return valid. However, the Tribunal did not delve deeply into this issue, as the primary focus was on the maintainability of the appeal.

The Tribunal concluded that the CIT(A)'s action in rejecting the assessee's lower appeal against the section 139(9) order as not maintainable under section 246A was correct. The appeal was dismissed on these grounds.

Conclusion:
The Tribunal dismissed the assessee's appeal, upholding the CIT(A)'s decision that an appeal against an order under section 139(9) is not maintainable under section 246A of the Income Tax Act, 1961. The assessee was advised to seek any other appropriate remedy under the law if so advised.