Case Law Details

Case Name : Commissioner of Income-tax Vs Sanjay Kumar Agrawal (Allahabad High Court)
Appeal Number : IT Appeal No. 345 OF 2009
Date of Judgement/Order : 14/12/2012
Related Assessment Year :
Courts : All High Courts (3629) Allahabad High Court (190)

HIGH COURT OF ALLAHABAD

Commissioner of Income-tax

Versus

Sanjay Kumar Agrawal

IT APPEAL NO. 345 OF 2009

DECEMBER 14, 2012

ORDER

Ram Surat Ram (Maurya), J

The present appeal has been filed under Section 260 (A) of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act’) from the order dated 30.9.2008 passed by the Income Tax Appellate Tribunal, ‘A’ Bench, Lucknow (hereinafter referred to as the ‘Tribunal’), by which, the addition of Rs. 6 lakhs in the income of the assessee has been deleted. The Income Tax Commissioner, Bareilly has proposed the following substantial question of law said to be arising out of the order of the Tribunal: –

“(1) Whether on the facts and circumstances of the case, the Tribunal is justified in law in setting aside the order of assessment made u/s 143(3)/147 of the Act without controverting the findings as recorded by the A.O. and affirmed by the CIT (A)?

(2)  Whether the A.O. rightly invoked the provisions of Section 68 of the Act for making the addition of Rs. 6,00,000/- which was bogus gift as the assessee failed to prove the genuineness of the transactions, credit worthiness and the real identity of the donors?

(3)  Whether the Tribunal which is the last fact finding authority is justified in law in ignoring totally the enquiry made by the ADIT (Inv.), New Delhi u/s 131(1)(d) of the Act about the so-called alleged donors?

(4)  Whether notice u/s 147/148 can be issued irrespective of the time available for issue of notice u/s 143(2) as Section 151 of the Act does not prescribe any such time limit for issue of notice u/s 147/148 when time for issue of notice u/s 143(2) is left?”

2. Briefly stated, the facts giving rise to the present appeal are as follows: –

The appeal relates to the Assessment Year 2005-06. The respondent-assessee submitted his income tax return showing an income of Rs. 40,000/- from salary and Rs. 40,000/- as agricultural income on 29.3.2006. The return was processed on 16.6.2006 u/s 143 (1) of the Act. Later on, the Assessing Officer issued a notice u/s 148 of the Act on 23.11.2006 to show cause that the gift of Rs. 6 lakhs shown in the income tax return, was a bogus transaction. After hearing the assessee, the Assessing Officer by order dated 14.12.2007 made an addition of Rs. 6 lakhs in the income of the assessee.

3. Feeling aggrieved, the assessee filed an appeal from the aforesaid order before the Commissioner of Income Tax (Appeals), Bareilly, which has been dismissed by the order dated 25.3.2008. The assessee filed a second appeal before the Income Tax Appellate Tribunal, ‘A’ Bench, Lucknow which was allowed by the impugned order dated 30.9.2008. The Tribunal found that there was no material before the Assessing Officer for initiating proceedings u/s 148 of the Act. Accordingly, the addition made after finalization of the return was illegal.

4. We have heard Sri Ashok Kumar, learned Senior Standing Counsel for the Revenue and Sri S.K. Garg for the respondent assessee.

5. Sri Garg has raised a preliminary objection to the maintainability of the appeal as the tax effect in the present case is less than Rs. 2 lakhs. The Central Board of Direct Taxes has issued a circular dated 27.3.2000 in exercise of powers u/s 268 (A) of the Act, which is reproduced as under:-

“2. In supersession of the above instruction, it has now been decided by the Board that appeals will be filed only in cases were the tax effect exceeds the revised monetary limits given hereunder:

(Tax effect) Rs.

(I) Appeal before the Appellate Tribunal (in income tax matters) 1,00,000

(II) Appeal under section 260A/reference under section 256(2) 2,00,000 before the High Court.

(III) Appeal in the Supreme Court. 5,00,000

The new monetary limits would apply with reference to each case taken singly. In other words, in group cases, each case should individually satisfy the new monetary limits. The working out of monetary limits will therefore not take into consideration the cumulative revenue effect as envisaged in the Board’s earlier instruction referred to above.

3. Adverse judgment relating to the following should be contested irrespective of revenue effect:

(I) Where Revenue audit objection has been accepted by the Department.

(II) Where the Board’s order, notification, instruction or circular is the subject matter of an adverse order.

(III) Where prosecution proceedings are contemplated against the assessee.

(IV) Where the constitutional validity of the provisions of the act are under challenge.”

The Board has, therefore, decided that the appeal before the Appellate Tribunal in tax matter could be filed where tax limit exceeds rupees one lac. It has excluded this monetary limit in the following four type of cases:

(I) Where Revenue audit objection has been accepted by the Department.

(II) Where the Board’s order, notification, instruction or circular is the subject matter of an adverse order.

(III) Where prosecution proceedings are contemplated against the assessee.

(IV) Where the constitutional validity of the provisions of the Act are under challenge.”

6. In view of the aforesaid circular, no appeal is required to be filed when tax effect is less than Rs. 2 lakhs. The conditions mentioned in Clause-3 of the Circular dated 27.3.2000, are not attracted in this appeal. The circular has been issued by the Central Board of Direct Taxes and is binding upon the Department.

7. In view of the aforesaid circular, the appeal is not maintainable and is dismissed as such.

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