Commissioner of Income Tax vs Manglam Ricinus Ltd.

The revenue is aggrieved by an order dated passed by the Income Tax Appellate Tribunal, Delhi Bench "A" (the Tribunal) in ITA No. 2249/Delhi/2005 relevant for the assessment year 2002-03.

The assessing officer disallowed an amount of Rs. 70,58,000 being interest liability claimed by the assessee. This view was reversed by the Commissioner (Appeals) (Commissioner (Appeals)).

Feeling aggrieved, the revenue preferred an appeal before the Tribunal which relied upon the instructions issued by the Central Board of Direct Taxes, which prescribe that if the tax effect is less than Rs. 1 lakh, no appeal should ordinarily be filed before the Tribunal.

On this basis, the Tribunal came to the conclusion that even if the order of the assessing officer is upheld, the income of the assessee would be negative and, therefore, the tax effect would be certainly less than Rs. 1 lakh. On this basis, the Tribunal declined to entertain the appeal. That is how the revenue is before us u/s 260A of the Income Tax Act, 1961.

We are in agreement with the view of the Tribunal that even if the order of the assessing officer is upheld the tax recovery so far as the revenue is concerned would be nil. In the event the question has any impact on subsequent years, we leave it open to the revenue to raise it in the succeeding years, if need arises.

Learned Counsel for the revenue submits that the tax effect is not required to be seen but the tax effect on the issue involved is to be seen. This is precisely what the Tribunal has done. We do not find any error in the view taken by the Tribunal.

No substantial question of law arises.

The appeal is dismissed.

We make it clear that in case the issue arises in the succeeding years and has any tax effect, it is left open for consideration.