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2013 (10) TMI 641 - HC - Income TaxLow Tax Effect - where returned / computed income is negative - Whether the Appellate Tribunal is right in dismissing the tax appeal of the revenue on the ground of low tax effect - Whether it is necessary to compute with degree of accuracy, declaration of loss made by the assessee in view of the statutory provisions contained in the Act – Held that:- Merely on the ground that even if the Assessing Officer's order is restored, the net result would be a negative income, the issue cannot be treated to be one of academic interest - The extent of loss claimed and allowed would be significant for variety of purposes, particularly, for the purpose of set off and carrying forward of such loss - We fail to see how such an issue can be seen as one of low tax effect - In a given case, an assessee may claim large amount by way of loss, which according to him he suffered during the assessment year - The Assessing Officer, while framing the assessment, may come to a conclusion that the loss is much smaller than what is claimed by the assessee - If in the appeal filed by the assessee, the CIT (Appeals) accepts the assessee's claim and sets aside the Assessing Officer's order, and if such order is allowed to stand merely on the ground that further appeal is not maintainable, it would be the CIT's computation of loss, which will prevail for all times to come without further scrutiny, by the higher forum. The order of CIT (Appeals) would achieve finality despite contentious issues being involved and the Revenue's disagreement to the order of the CIT (Appeals) - Eventually if the assessee declares positive income in future years, the claims of carry forward and set off of loss would be judged on the basis of the order passed by the CIT, which order would not have been scrutinized by the Tribunal only on the ground that the appeal was not maintainable - the Appeal of the Revenue is on of low tax effect - Our answer has to be in the negative - For an assessee to claim carry forward and set-off of losses, series of provisions have been made in the Act - It is necessary that loss claimed by an assessee is properly computed - Such declaration of negative income just as declaration of positive income should be allowed to go through the entire gamut of Appeals and Revisions. Board’s Circular - Whether by virtue of the Board's circulars issued from time to time, which in view of the Section 268A of Act, have acquired considerable significance, and force the appeal presented to the Tribunal, could be termed as not maintainable – Held that:- Circulars of the Board nowhere provide that in case of return of loss automatically per se irrespective of difference in the Assessing Officer's perception and that of the CIT (Appeals) of the computation of loss, further appeal would be shut out - Merely because even as per the Assessing Officer's order, ultimately income of the assessee is negative, the Revenue's appeal before the appellate Tribunal would not be barred by the Board's circular under Section 268A of the Act - the notional tax effect would have to be above the limits prescribed by the Board from time to time for presentation of such appeals - the notional tax effect would be higher than the limits prescribed by the Board in different circulars, the Tribunal committed an error in dismissing the Revenue's appeals as being not maintainable - all tax appeals are allowed. Judgments of the Tribunal under challenge in respective appeals are set aside - All proceedings are remanded to the Tribunal for entertaining appeals on merits and to decide the issues arising in such appeals in accordance with law after issuing notice to the assesses – Decided in favour of Revenue.
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