Commissioner of Income Tax vs C.T. Kiruba

R. Sudhakar, J.

The Revenue has filed these appeals challenging the order of the Income-tax Appellate Tribunal "D" Bench, Chennai, dated October 27, 2006, made in I.T. (SS) A. Nos. 87/Mds/2004 and 215/Mds/2003 for the block period April 1, 1989, to October 27, 1999, and the same were admitted on the following questions of law:

"(a) Whether the Tribunal is right in deleting the addition of Rs. 2 lakhs made on account of renovation of residential building, including wooden work, which was admitted by the assessee himself as the cost of investment?

(b) Whether the Tribunal is right in deleting the addition of Rs. 5,09,700 made in the construction of quarters for nurses which was based on the Departmental valuation report and is valid in view of the provisions of section 142A of the Income-tax Act?

(c) Whether the Tribunal is right in deleting the interest charged under section 158BFA(1) as the return for the block period had been filed belatedly, especially when the charging of interest is mandatory?

(d) Whether the Tribunal is right in law in not considering the sworn statement dated October 27, 1999, given by the assessee when the search under section 132 of the Act had taken place?"

Even though these appeals were admitted on the questions of law, referred to supra, we are not inclined to entertain these appeals in view of the preliminary objection made by the learned counsel for the respondent that the monetary limit to prefer an appeal is pegged at Rs. 4,00,000 by the Central Board of Direct Taxes, vide Instruction No. 2 of 2005, dated October 24, 2005, read with Instruction No. 5 of 2007, dated July 16, 2007.

In the case on hand, the tax liability pertains to the additions made by the Assessing Officer on account of cost of renovation and construction of nurses quarters. The preliminary objection of the assessee and the tax liability under the above heads is as under:

Preliminary objection on maintainability of Department''s tax case appeal:

Instruction No. 2 of 2005, dated October 24, 2005, read with Instruction No. 5 of 2007, dated July 16, 2007, fixed the monetary limit to prefer a tax case appeal only if the tax effect exceeds Rs. 4 lakhs. The assessee submits that the assessee does not fall within any of the exceptions provided in the instruction mandating the Department to prefer an appeal. The total tax effect excluding interest is as follows:

The learned counsel for the assessee also pleaded that the case of the assessee does not fall within the exceptions specified in Instruction No. 1979 issued by the Central Board of Direct Taxes on March 27, 2000, where irrespective of revenue effect the matter should be contested by the Department. The relevant portion of the said instruction reads as under:

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

(i) Where the Revenue audit objection in the case 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 learned standing counsel for the Revenue is not disputing the fact that the tax effect in the present case is less than Rs. 4 lakhs and that the assessee''s case does not fall within the exceptions specified in Instruction No. 1979, dated March 27, 2000. Considering the circulars issued by the Central Board of Direct Taxes and the tax effect involved in the case on hand, this court is not inclined to entertain these appeals. Accordingly, without going into the merits of the questions of law formulated, these appeals are dismissed as not maintainable. No costs.