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Facts
The Revenue filed an appeal and the Assessee filed a Cross Objection against the order of the CIT(Appeals) concerning Assessment Year 2021-22. The Revenue's appeal pertains to two additions made by the Assessing Officer, one for disallowance under Section 14A and another for alleged bogus purchases.
Held
The Tribunal noted that the tax effect in the Revenue's appeal was less than Rs. 60 lakhs, making it liable for dismissal under CBDT Circular No. 9/2024. The Tribunal dismissed both the appeal and the cross objection.
Key Issues
Whether the appeal filed by the Revenue is dismissible in limine due to the tax effect being below the monetary limit prescribed by the CBDT Circular, and whether the additions made by the AO were justified.
Sections Cited
14A, 69C
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Income Tax Appellate Tribunal, DELHI BENCH “A” NEW DELHI
Before: SHRI CHALLA NAGENDRA PRASAD & SHRI AVDHESH KUMAR MISHRA
आदेश /O R D E R
PER C.N. PRASAD, J.M.
This appeal and Cross Objection are filed by the Revenue and Assessee respectively against the order of the Ld. CIT(Appeals)- NFAC dated 29.08.2024 for the AY 2021-22. Revenue in its appeal raised the following grounds:
1. “The order of the Ld. CIT(A) is perverse, erroneous and is not tenable on facts and in law.
2. Whether the Ld.CIT(A) has erred in law & fact by not taking into consideration the judgment of the Hon’ble Gujarat High Court in the case of N.K. Industries Limited vs. DCIT in 241, 242, 260 & 261 of 2003, vide order dated 20.06.2016 and directing the AO to re-assess because taxing only certain percentage of bogus purchases goes against the principles of Section 69C of the Act.
3. Whether the Ld. CIT(A) has erred in taking into consideration the Hon’ble Apex Court order dated 11.3.2022 in the case of Pr. Commissioner of Income Tax vs. Delhi International Airport (P) Ltd. vide which it has accepted the SLP 113(SC)/[2022], wherein the identical issues (Issue of disallowance u/s 14A of the Act) were reported.
4. The grounds of appeal are without prejudice to each other.
5. The appellant craves leave to add, amend, alter or forgo any grounds of appeal either on or before the final hearing of the appeal.”
The Assessee in its cross objection raised the following grounds:
“That on the facts and in the circumstances of the case and in law the Ld.CIT(Appeals) erred in confirming the following actions made by the Assessing Officer: 1. Not deleting addition of Rs.10,20,000/- on account of genuine purchases and only directing to confirm the addition to the extent of 15% of such purchases. All the above actions being erroneous unlawful and untenable it is prayed that the same must be quashed with directions for appropriate relief.”
Ld. Counsel for the assessee, at the outset, submitted that the tax effect in Revenue’s appeal is less than Rs.60 lakhs and therefore the appeal is liable to be dismissed in view of the CBDT Circular No.09 of 2024 dated 17/09/2024. Ld. Counsel submitted the following short synopsis of facts and arguments:
“This appeal has been filed by the Department in respect of two additions annulled by the Ld. CIT(A):- i) Addition made as per para 2.5 in a sum of Rs.6,28,000/- in respect of disallowance u/s 14A of the Income Tax Act, 1961 (the Act); and ii) Addition made as per para 4.11 in a sum ofRs.10,20,000/- on account of alleged bogus purchases. These two additions which form the Ground of Appeal of the Department in the Form-36 as submitted by them add up to Rs.16,48,000/- only. The tax on these additions by any stretch of imagination cannot exceed Rs.60,00,000/-. Since the appeal filed by the Department is against the monetary limits as prescribed by the Board vide Circular
No. 9/2024 dated 17.09.2024, the appeal merits to be dismissed in limine. In the event of the appeal being dismissed on the aforesaid ground, Form-36A as filed by the Assessee in this regard may also be considered as withdrawn.”
Heard rival submissions, perused the record before us. As per Form 36 filed by the Department the total amount of additions or disallowances made in the assessment order was Rs.60,33,420/- and the amount disputed in appeal is only Rs.16,48,000/- and the tax effect on such disputed amount is Rs.8,95,708/-.
Ld. DR could not point out whether the issues in appeal fall under any exceptions provided by the Circular of the CBDT. Since the total tax effect in this Revenue’s appeal is less than Rs. 60 lakhs the appeal is liable to be dismissed in view of the Board Circular.
However, in the event of the Revenue proving that the issues in appeal falls under any exceptions provided by the CBDT in its Circular the Revenue is at liberty to file miscellaneous application to recall the order and to hear the appeal on merits. Similarly, the assessee is also given liberty to file a miscellaneous application to recall the cross objection to hear it on merits. With these observations the appeal of the Revenue and the Cross Objection of the Assessee are disposed off.
In the result, the appeal of the Revenue and the Cross Objection filed by the Assessee are dismissed.
Order pronounced in the open court on 13/08/2025