2018 (8) TMI 208 - HC - Income Tax

Court grants review, sets aside judgment, remands matter to Tribunal for jurisdiction determination. Reconsideration ordered on agricultural income claims.

Smt. B. Jayalakshmi Versus The Assistant Commissioner of Income Tax

Smt. B. Jayalakshmi Versus The Assistant Commissioner of Income Tax - [2018] 407 ITR 212 (Mad) Issues Involved:1. Maintainability of Review Applications under Section 260A(7) of the Income Tax Act.2. Jurisdiction of the Income Tax Appellate Tribunal (ITAT) to entertain appeals based on remand reports.3. Evaluation of agricultural income claims by the assessee.4. Consideration of monetary limits for filing appeals by the department before the Tribunal based on CBDT Circular No. 21 of 2015.Issue-Wise Detailed Analysis:1. Maintainability of Review Applications under Section 260A(7) of the Income Tax Act:The primary objection raised by the Revenue was that the Income Tax Act does not confer the power of review under Section 260A(7). However, the court referred to multiple precedents, including the Supreme Court's decisions in VIP Industries Ltd. vs. Commissioner of Central Excise and Commissioner of Income Tax, Guwahati vs. Meghalaya Steels Limited, to establish that the High Court, as a court of record, inherently possesses the power of review. The court concluded that the review applications are maintainable, emphasizing that the High Court has both the power and duty to correct apparent errors in its records.2. Jurisdiction of the Income Tax Appellate Tribunal (ITAT) to entertain appeals based on remand reports:The assessee argued that the ITAT lacked jurisdiction to entertain the Revenue's appeal against the CIT(A)'s order, which was based on the remand report of the Assessing Officer. The court analyzed the facts, noting that the Assessing Officer's remand report was in favor of the assessee, confirming the agricultural income. The Tribunal, however, failed to consider this remand report and merely reiterated the Assessing Officer's initial findings. The court held that the Tribunal should have first determined its jurisdiction to entertain the appeal, given that the CIT(A)'s decision was based on the remand report. This oversight constituted an error apparent on the face of the judgment, warranting a review and remand of the case to the Tribunal for fresh consideration.3. Evaluation of agricultural income claims by the assessee:The court examined the evidence presented by the assessee, including the remand report, which confirmed the agricultural activities and income. The CIT(A) had accepted this evidence, but the Tribunal dismissed the appeal without considering the remand report. The court emphasized that the Tribunal should have evaluated the findings of the CIT(A) based on the remand report and the detailed enquiry conducted by the Assessing Officer. The failure to do so led to the erroneous dismissal of the assessee's claim for agricultural income.4. Consideration of monetary limits for filing appeals by the department before the Tribunal based on CBDT Circular No. 21 of 2015:The assessee also raised the issue of monetary limits for filing appeals by the department, citing CBDT Circular No. 21 of 2015, which sets a threshold of Rs. 10,00,000 for appeals before the Tribunal. The court allowed the assessee to present this argument before the Tribunal during the rehearing, as it was relevant to the maintainability of the Revenue's appeal.Conclusion:The court allowed the review applications, set aside the judgment dated 30.09.2013, and remanded the matter to the Tribunal to decide its jurisdiction to entertain the appeals filed by the Revenue. If the Tribunal finds the appeals maintainable, it should reconsider the other issues after providing an opportunity to both parties. The assessee was also permitted to raise the issue of monetary limits during the Tribunal's rehearing.