COMMISSIONER OF INCOME TAX,RAIPUR vs. SMT.MANISHA ROHRA

PDF · subscribers
TAXC/14/2009HC ChhattisgarhCGHC01013156200912 January 2010Bench: HON'BLE SHRI JUSTICE DHIRENDRA MISHRA,HON'BLE SHRI JUSTICE RANGNATH CHANDRAKAR3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court, while acknowledging the substantial questions of law raised, did not delve into the merits of the case. The revenue's counsel fairly submitted that the tax effect involved in the appeal was less than the minimum monetary limit of Rs. 4 lac, as stipulated by the Central Board of Direct Taxes (CBDT) Instruction No. 5/2008 dated 15.05.2008. This instruction sets the minimum tax effect for preferring appeals before the High Court. In light of this instruction and Section 268A of the Income Tax Act, the Court deemed it unnecessary to examine the case on its merits. Consequently, the appeal was dismissed on the grounds of negligible tax effect. No specific finding was given on the ITAT's decision regarding the propriety of the AO's inquiry or the applicability of Section 263.

What were the facts?

The Revenue, represented by the Commissioner of Income-Tax, Raipur, appealed against an order of the Income Tax Appellate Tribunal, Bilaspur. The Tribunal had quashed an order passed by the Commissioner under Section 263 of the Income Tax Act, 1961. The Commissioner had initiated proceedings under Section 263, holding that the assessment order passed under Section 143(3) for Assessment Year 2007 was erroneous and prejudicial to the interest of the revenue. This was because the Assessing Officer (AO) had accepted the assessee's claim of Long Term Capital Gain exemption under Section 10(38) without proper verification. The assessee, Smt. Manisha Rohra Alias Sulochana, had declared a total income of Rs. 1,05,260/- against a returned income of Rs. 85,260/-, which included Rs. 2 lac under the head 'Long Term Capital Gain' claimed as exempt.

What were the issues?

1. Whether, in the facts and circumstances of the case, the ITAT was justified in law in quashing the order passed under Section 263 and holding that the assessment order was not erroneous and prejudicial to the interest of revenue, despite a proper and adequate inquiry not being made by the AO before passing the assessment order? (Question of law) 2. Whether the ITAT was justified in quashing the order under Section 263 by holding that relevant papers were called for by the AO and filed by the respondent, constituting a proper inquiry of the exemption claimed under Section 10(38)? (Question of mixed law and fact) Assessee's contentions: The assessee argued that the AO had conducted proper inquiries by calling for and receiving relevant papers, and therefore, the assessment order was not erroneous or prejudicial to the revenue. The Tribunal agreed with this contention. Revenue's contentions: The revenue contended that the AO had failed to conduct proper verification and investigation before accepting the assessee's claim for exemption under Section 10(38), making the assessment order erroneous and prejudicial to the revenue's interest. The revenue relied on the Commissioner's finding to this effect.

Which sections of the Income-tax Act were involved?

Section 260A,Section 143(3),Section 263,Section 10(38),Section 268A

AI-generated summary — verify with the full judgment below

HZGH COURT OF CHHATriSGARH AT BILASPUit (Revenue; Commlssioner of Income-Tax, Raipur Smt. Manisha Rohra Alias Sulochana, W/o Anil Kumar Rohra, Sunder Ganj Ward, f't. Shri Rajeev Shrivastava and Smt. Shradha P.ao, counsel for the appeliant/revenue. Shri Neelabh Dubey, counse! for the respondent/assessee. Vf The appeliant/revenue has preferred this appea! under Sectlon 260A of the Income Tax Act, 1961 (in short "the Act") against the impugned order passed by the Income Tax Appeifate Tribunal, Biiaspur (in short "the Tribunal") on the foliowins substantiai questions of law: "01. Whether in the facts and drcumstances of the case, the ITAT wasjustified in taw, in quashing the order passed u/s. 263 and in hofding that the assessment order was not erroneous and prejudicial to the interest of revenue though pmper and adequate inqu'iry was not made by the A.O. before passing assessment order. " 02. Whether the ITAT was justified in quashing the order u/s 263 by holding that relevant papers were ca'iled for by the AO and were filed by the respondent and it constituted proper enquiry of the O'S'/T? ofexemption clairried u/s 10(38)." 02. Briefly stated, facts ofthe case, as projected in the impugned ,order, are that the assessment was compieted under Section li ,..--^")'

143(3) of the Act on 23.1.2007 on a total income of Rs.1,05,260/- against the returned income of Rs.85,260/- by making routine dlsallowances. Later on, it was discovered by the Commissloner that the assessee has shown an income of R.S. 2 lac under the head "Long Term Capital Gain" and claimed exemption under Section 10(38) of the Act. Learned Commissionsr, Income Tax (in short "CIT") In his order under Section 263 of the Act he!d the said assessment erroneous md prejudicial to the interest of the revenue as he found that the AO has accepted the claim of the assessee wlthout proper veriflcation and investigation ofthefacts. The assessee, aggrieved by the order of iearned CIT, preferred appeal before the Tribuna!. Learned Tribunal ailowed the appeai by the impugned order i/vith a finding that tearned CIT vvas not justified in hoiding that the AO aliowed exemption under Section 10(38) without making proper enquiries, and further held that the. order of the AO cannot be held to be erroneous or prejudidai to the interest ofthe revenue and the >resent case was not flt for invoklng provisions of Section 263 of the Act, Shri Rajaev Shrivastava, learned counsel for the ippeiianfrevenue, before entering into merits of the case, fairiy submlts that even if She order passed by learned CIT under Section 263 Is upheld, tax effect involved In this appeal is less than the minimum monetary iimit of Rs. 4 lac as fixed by the Centra! Board of Direct Taxes vide its Instructions No.5/08 dated 15.5.2008, according to which for preferring appeai before the High Court, the minimum tax effect has been flxed at Rs.4 lacs. , Heard iearned counsel for the parties. The Central B( instructions to circuiars from No.5/2008 da- oard of Direct Taxes (in short "the Board") issues the income-tax authoritles by way of Issuing tlme to tlme. The Board, vlde Instruction ted 15.5.2008, In supersession of the earlier ^^.Y

^3^<r^^, ! ^s ^.%. ^<^ <!fe»-."i<r ^'S&i^^SiiSS^Ss'M^SfS^SG^ggsssS^ 'K^^^-WS^- Instructions, Instruc'ted the income-tax authorities regarding the monetary iimlts and conditions for filing departmental ippeais before the Appellate Tribunals, High Courts and Supreme Court. Instruction No.3 deals with the monetary imits, Instruction No.4 defines the tax effect, whereas Instructions No. 8 & 9 mention the conditlons, in which iverse judgments are to be contested irrespective of the tax effect. As per above instructions, for filing appeal before the High Court, the minimum monetary limit has been fixed at Rs.4 lacs. Thus, In view of the latest Instruction dated 15.5.2008 and Section 268A of the income Tax Act, we do not deem it necessary to go into the merits of the case. Accordingiy, the appea! is dismissed for having negligible tax 'ffect, Sd/- DhirendraMishra Judge "> Sdl- R.N. Chandrakar 3udge l-,,., rl::- -/"

More judgments on Section 263

All 13,616 judgments and leading authorities on Section 263 →

Recent GST High Court judgments

Search GST case law →