1990 (6) TMI 88 - AT - Income Tax

Summary

Issues:
1. Interpretation of jurisdiction of Single Member Benches under sub-section (3) of section 255 of the IT Act, 1961.

Comprehensive Analysis:
The judgment delivered by the Appellate Tribunal ITAT Allahabad pertained to a miscellaneous petition raising a question of law regarding the jurisdiction of Single Member Benches under sub-section (3) of section 255 of the IT Act, 1961. The assessee contended that the provision should include cases where the assessment results in a negative total income exceeding Rs. 1 lac, thus arguing that a Single Member Bench would not have jurisdiction in such cases. The case in question involved an assessee who had filed a return of income showing a loss of Rs. 92,46,920, which was determined by the assessing officer as a net loss of Rs. 37,35,440. The appeal was heard by a Single Member Bench, leading to the present petition challenging the jurisdiction of the Single Member Bench due to the negative total income exceeding Rs. 1 lac.

The revenue, on the other hand, contended that the legislative intent behind sub-section (3) of section 255 was to consider total income exceeding Rs. 1 lac as the dividing line for jurisdiction. It was argued that any loss amount would inherently be less than Rs. 1 lac, thus falling within the purview of a Single Member Bench. The assessee's counsel argued that income should encompass losses for assessment purposes, suggesting that the term 'total income' should include loss figures as well.

The Tribunal analyzed the statutory provision and held that the phrase "total income does not exceed Rs. 1 lac" clearly indicated a positive figure of Rs. 1 lac, irrespective of whether it involved losses. The judgment emphasized that the criterion for determining jurisdiction was based on the quantum of income, not additions made by the assessing officer. The Tribunal clarified that even in cases where a substantial loss was reduced to a minimal positive figure, the jurisdiction would remain with the Single Member Bench. The judgment rejected the assessee's argument that a negative total income exceeding Rs. 1 lac should alter the jurisdiction of the Bench.

Furthermore, the Tribunal highlighted that the interpretation of the statute was at the core of the issue, and even if the assessee's interpretation was plausible, it would lead to conflicting views on statutory interpretation. Consequently, the Tribunal dismissed the petition of the assessee, affirming the jurisdiction of the Single Member Bench in the case at hand.