2024 (10) TMI 542 - HC - Income Tax

Maintainability of the appeal in view of low tax effect - Revision u/s 263 - assessee had not furnished Form 10DA along with the return, resultantly, the deduction claimed u/s 80JJAA ought to have been disallowed - contention is that taking the case of the Department at the highest, the entire deduction even if disallowed, the tax demand would be less than two crores. As further argued that non-filing of the Form 10DA along with the return, in itself, cannot be a ground for disallowing the deduction, has been decided in favour of the assessee by the jurisdictional Court. As respondent submits that Circular 9 retains the exceptions provided in Circular 5 dated 15.03.2024. The argument is that the case in hand falls within the exception in Clause F of para 3.1 of Circular 5 of 2024. The appeal is maintainable as the order is passed u/s 263 of the Act and tax effect is not quantifiable. HELD THAT - The contention of the counsel for the appellant lacks merit. There is a distinction between 'tax not quantifiable' and 'tax not quantified'. In the present case, the contention of respondent that even taking the case at extreme, the disallowance of deduction would be of Rupees Three Crores approximately and the tax effect would be of Rupees One Crore odd approximately. The appeal is dismissed as not maintainable in view of Circular 9 of 2024. The proposed substantial question of law is kept open.

Summary

The appeal was filed against an order by the Income Tax Appellate Tribunal regarding disallowance of deduction under Section 80JJAA. The High Court dismissed the appeal as not maintainable due to Circular 9 of 2024, stating that the tax effect was quantifiable. The substantial question of law remains open.