ITAT Dismisses Revenue Appeals Below ₹60L Tax Effect, Calls Grounds ‘Cryptic & Nebulous’

ITO Vs Janardan Shyam Bihari Singh (ITAT Nagpur)

The Income Tax Appellate Tribunal (ITAT), Nagpur Bench, has dismissed the Income Tax Department’s appeal against civil contractor Janardan Shyam Bihari Singh for Assessment Year 2011-12. The Revenue had challenged an order from the Commissioner of Income Tax (Appeals) which reduced an addition made by the Assessing Officer. The original addition stemmed from the assessee’s alleged failure to file an income tax return despite having contract receipts exceeding ₹1.97 crore, and not getting accounts audited as required by Section 44AB of the Income Tax Act, 1961. The department had argued that this indicated a potential suppression of income, necessitating a justified estimation of net profit.

However, the ITAT, after reviewing the appeal, found the grounds raised by the Revenue to be “cryptic and nebulous,” lacking sufficient detail to clearly articulate the department’s grievance. The Tribunal also strongly deprecated the “mechanical approval of grounds of appeal by the competent authority,” cautioning against frivolous litigation. Crucially, the ITAT noted that the tax effect involved in the appeal was below the prescribed monetary limit of ₹60 lakhs, a common threshold for tax authorities to pursue appeals before higher forums. The Departmental Representative, in a concession, informed the Tribunal that there was no merit in the Revenue’s case.