2009 (12) TMI 101 - HC - Income Tax

Filling of an appeal tax effect is less than Rs. 2 lakhs - . The Assessing Officer, while completing the reassessment proceedings under Section 143(3) read with Section 147 of the Income Tax Act, disallowed/withdrawn 1/4th of the expenses incurred towards insurance/ depreciation on car and interest on car loan, since the assessee himself disallowed 1/4th car maintenance expenses in his return of income. Aggrieved by the disallowance, the assessee filed an appeal before the Commissioner of Income Tax (Appeals), who allowed the appeal by holding that the Assessing Officer had no jurisdiction to reopen and reassess the returns. Aggrieved by the order of the Commissioner of Income Tax (Appeals), the Revenue filed an appeal before the Tribunal, which dismissed the appeal on the ground that the tax effect in the case on hand is below the monetary limit fixed by the Central Board of Direct Taxes for filing an appeal before the Tribunal. The correctness of the same is now put in issue in this appeal by the Revenue on the sole ground that it is of-course true that there is a circular fixing the monetary limit for filing an appeal before the Tribunal. But, the circular is not an absolute circular. There are certain exceptions contained therein. One of the exceptions is that if there is an audit objection, the Revenue can file an appeal notwithstanding the fact that the tax effect is less than the monetary limit quoted by the Central Board of Direct Taxes. held that - Though the said argument of the Revenue is interesting to hear, the fact remains that no such argument is appeared to have been advanced before the Tribunal, which is amply evident by a mere reading of the order of the Tribunal. Hence, the question of law formulated does not arise from the order of the Tribunal revenue appeal dismissed

Summary

Issues:
Appeal under Section 260A of the Income Tax Act against the order of the Income Tax Appellate Tribunal Chennai 'D' Bench dated 15.1.2009 for the assessment year 2002-2003.

Analysis:
1. The main issue in this case was whether the Tribunal was correct in dismissing the appeal by the Revenue due to the tax effect being less than the monetary limit set by the Central Board of Direct Taxes for filing an appeal. The Revenue argued that despite the monetary limit, exceptions exist, such as in cases involving audit objections, allowing the appeal to proceed. However, the Court noted that this argument was not raised before the Tribunal, rendering it irrelevant. The Court cited precedents from other High Courts to support its decision, emphasizing that the issue has been previously considered and dismissed. The appeal was ultimately dismissed as it did not present a substantial question of law for consideration.

2. The background of the case involved the Assessing Officer disallowing a portion of expenses related to car maintenance and interest on car loan during reassessment proceedings. The assessee challenged this disallowance before the Commissioner of Income Tax (Appeals), who ruled in favor of the assessee, stating that the Assessing Officer had no jurisdiction to reopen and reassess the returns. Subsequently, the Revenue appealed this decision before the Tribunal, which then dismissed the appeal based on the tax effect being below the monetary limit for filing an appeal. The Court's decision to dismiss the appeal was based on the lack of a substantial question of law arising from the Tribunal's order.

3. The Court highlighted that while the Revenue's argument regarding exceptions to the monetary limit for filing appeals was interesting, it was not raised before the Tribunal, making it irrelevant to the current appeal. The Court referenced judgments from Rajasthan High Court, Madras High Court, and Bombay High Court that had previously addressed similar issues, reinforcing the dismissal of the appeal in this case. The decision to dismiss the appeal was based on the lack of a valid question of law warranting consideration.

In conclusion, the High Court of Madras dismissed the appeal filed by the Revenue under Section 260A of the Income Tax Act against the order of the Income Tax Appellate Tribunal. The Court held that the appeal did not involve any substantial question of law, especially considering the arguments presented and the precedents cited. The judgment emphasized the importance of raising relevant arguments before the appropriate authorities and highlighted the significance of adhering to established legal principles in tax matters.