THE COMMISSIONER OF INCOME TAXAHMEDABAD - II vs. KADAM EXPORTS PVT. LTD.

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TAXAP/1110/2007HC GujaratGJHC24040991200722 December 2014Bench: HONOURABLE MR. JUSTICE KS JHAVERI,HONOURABLE MR. JUSTICE K.J.THAKER3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court did not decide the substantial questions of law on merits. Instead, the Court dismissed the appeal on the ground of 'smallness of amount'. The Court observed that the revenue effect was less than Rs. 1 lakh and, in accordance with CBDT Instructions No. 1979 dated 27th March, 2000 and 02 of 2005, such appeals should not be filed. Therefore, the appeal was not entertained. The questions of law were implicitly answered in favour of the assessee and against the revenue by virtue of the dismissal on this procedural ground. No specific finding was given on the leviability of interest under sections 234B and 234C or on the debatable nature of the issue. The operative direction was to dismiss the appeal.

What were the facts?

The Commissioner of Income Tax, Ahmedabad - II (the appellant-revenue) filed an appeal before the High Court of Gujarat challenging an order dated 17.11.2006 passed by the Income-tax Appellate Tribunal (ITAT), Ahmedabad Bench. The ITAT's order pertained to ITA No. 2012/Ahd/2002 for the assessment year 1997-98. The appeal was admitted by the High Court on 18.01.2008, and substantial questions of law were framed. The High Court noted that the revenue effect in the present case was less than Rs. 1 lakh. Relying on CBDT Instructions No. 1979 dated 27th March, 2000 and 02 of 2005, which stipulate that appeals should not be filed where the revenue effect is less than Rs. 1 lakh, the Court decided not to entertain the appeal.

What were the issues?

The High Court was called upon to decide two substantial questions of law: 1. Whether the Appellate Tribunal was right in law and on facts in holding that interest under sections 234B and 234C is not leviable when the income is assessed under section 115JA of the Income Tax Act? 2. Whether the Appellate Tribunal was right in law and on facts in holding that the issue relating to the levy of interest under sections 234B and 234C is debatable, and therefore, the said interest cannot be levied while processing the return under section 143(1)(a) of the Act? The judgment records the framing of these questions by the Court. No specific arguments from the assessee or the revenue are detailed in relation to these questions, other than the fact that the revenue preferred the appeal against the ITAT's order.

Which sections of the Income-tax Act were involved?

Section 115JA,Section 143(1)(a),Section 234B,Section 234C

AI-generated summary — verify with the full judgment below

O/TAXAP/1110/2007 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 1110 of 2007

FOR APPROVAL AND SIGNATURE:

HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER ================================================================ 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ================================================================ THE COMMISSIONER OF INCOME TAXAHMEDABAD - II....Appellant(s) Versus KADAM EXPORTS PVT. LTD.....Opponent(s) ================================================================ Appearance: MRS MAUNA M BHATT, ADVOCATE for the Appellant(s) No. 1 MR TUSHAR P HEMANI, ADVOCATE for the Opponent(s) No. 1 MS VAIBHAVI K PARIKH, ADVOCATE for the Opponent(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER

Date : 22/12/2014 Page 1 of 3

O/TAXAP/1110/2007 JUDGMENT

ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. By way of this appeal, the appellant-revenue has challenged the order dated 17.11.2006 passed by the Income-tax Appellate Tribunal, Ahmedabad Bench in ITA No. 2012/Ahd/2002 for the assessment year 1997-98. 2. While admitting this appeal on 18.01.2008, this Court has framed the following substantial question of law: [A] Whether the Appellate Tribunal was right in law and on facts in holding that interest u/s. 234B and 234C is not leviable when the income is assessed u/s. 115JA of the Act? [B] Whether the Appellate Tribunal is right in law and on facts in holding that issue relating to levy of interest u/s. 234B and 234C is debatable and therefore the said interest cannot be levied while processing the return u/s. 143(1)(a) of the Act? 3. In our view, the amount involved in the present case is a small one and the revenue effect is less than Rs. 1 lakh, and therefore, as per CDBT Instruction No. 1979 dated 27th March, 2000 and 02 of 2005, the revenue ought not to have come in appeal where the total revenue effect is less than Rs. 1 lakh, and therefore, this appeal is not entertained. The questions are answered in favour of the assessee and against the revenue. This appeal is dismissed on the ground of smallness of amount. Liberty to revive in case of difficulty. Page 2 of 3

O/TAXAP/1110/2007 JUDGMENT (K.S.JHAVERI, J.) (K.J.THAKER, J) divya Page 3 of 3

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