2022 (2) TMI 1086 - AT - Income Tax

Tribunal Upholds Revenue Authority's Assessment, Emphasizes Statutory Compliance

The Tribunal upheld the Revenue authority's orders, dismissing the Assessee's appeals contesting assessments for AYs 2002-03 and 2003-04 under section ... Special provision for computing profits and gains of business of plying, hiring or leasing goods carriages u/s 44AE - whether the taxable income of the assessee is to be taken at the presumptive rate of 8 (eight) per cent (of turnover), as prescribed u/s. 44AE of the Act, or at the higher income disclosed per the assessee's regular accounts, which stand duly audited? - HELD THAT:- It is clear that sec. 44AE, a non obstante clause, represents a code in itself and, further, provides for exceptions thereto as well as a built-in mechanism to effectuate the same. The right to adopt a lower than the presumptive rate stands taken away by Finance Act, 1997 (s. 44AE(6)). As explained by the Apex Court in CBI vs. Keshub Mahindra & Others [2011 (5) TMI 913 - SUPREME COURT] that no decision by any court, including itself, can be read in the manner as to nullify the express provisions of an Act. For the second aspect (b), it is again well-settled that the assessment of income under the Act is to be, subject to the provisions of the Act, of the real income, for which reference may be made to section 5 defining the scope of 'total income' under the Act (also see Poona Electric Supply Co. Ltd. [1965 (4) TMI 20 - SUPREME COURT] The argument of giving cognizance to the returned income de hors the audited accounts, which is admittedly higher than the presumptive rate u/s. 44AE, can hardly have the sanction of law. Therefore, have no hesitation in, notwithstanding that the appeals have been preferred by the assessee against the order by the Hon'ble jurisdictional High Court which, as explained, are yet to be decided, uphold the orders of the Revenue authority, finding the subject matter to be squarely covered by the Tribunal's decision in the assessee's own case. Sh. Shrivastava could not explain as to how the same was not in conformity with the extant law. His plea of keeping the matter in abeyance also cannot be accepted. The matter having been already decided by the Tribunal, the decision by the Hon'ble High Court would equally apply to this order as well. Issues:Dismissal of appeals contesting assessments under section 143(3) for AYs 2002-03 and 2003-04 regarding the taxable income calculation under section 44AE of the Income Tax Act, 1961.Analysis:Issue 1: Dismissal of AppealsThe judgment pertains to the dismissal of appeals by the Assessee contesting their assessments for AYs 2002-03 and 2003-04 under section 143(3) of the Income Tax Act, 1961. The appeals raised a common issue regarding the determination of the taxable income under section 44AE. The Tribunal heard the appeals together and disposed of them through a common order for convenience. The Assessee argued that the appeals were covered against them by a previous Tribunal order for AYs 1994-95 to 2001-02. The core issue revolved around whether the taxable income should be calculated at the presumptive rate of 8% of turnover as per section 44AE or at a higher income disclosed in the regular audited accounts of the Assessee.Issue 2: Interpretation of Section 44AEThe Tribunal analyzed the provisions of section 44AE, which provide a special provision for computing profits and gains for businesses involving goods carriages. The section mandates that the income of such businesses shall be deemed to be the aggregate of profits and gains computed as per the specified criteria. The Tribunal emphasized that section 44AE is a non-obstante clause and represents a comprehensive code in itself. It highlighted that the right to adopt a lower income than the presumptive rate was removed by an amendment in the Finance Act, 1997. The Tribunal referred to a previous Division Bench order where it was clarified that the income to be considered should be based on audited accounts rather than the returned income by the Assessee.Issue 3: Legal Interpretation and PrecedentsThe Tribunal relied on established legal principles to interpret the provisions of section 44AE. It emphasized that clear statutory provisions must be given effect without ambiguity. The Tribunal cited relevant case laws to support its interpretation, emphasizing the need for strict construction of taxing statutes. It clarified that the assessment of income under the Act should reflect the real income, as defined by the Act. The Tribunal rejected the Assessee's argument of considering the returned income over audited accounts, as it was not in line with the statutory provisions.ConclusionThe Tribunal upheld the orders of the Revenue authority, finding the issue to be covered by the Tribunal's decision in the Assessee's own case. It dismissed the appeals by the Assessee, stating that the matter had already been decided by the Tribunal and the decision by the High Court would equally apply. The judgment highlighted the need to avoid repetitive appeals and emphasized compliance with existing legal procedures. The appeals were ultimately dismissed by the Tribunal.This detailed analysis provides a comprehensive overview of the judgment's key issues, legal interpretations, and the Tribunal's decision regarding the dismissal of the appeals related to the calculation of taxable income under section 44AE of the Income Tax Act, 1961.