THE DCIT, CENTRAL CIRCLE-2(4), AHMEDABAD vs. M/S. SITA FABRIC MILLS PVT.LTD., AHMEDABAD

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ITA 583/AHD/2013Status: DisposedITAT Ahmedabad16 October 2020AY 2007-082 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the appeals of the Revenue were liable to be dismissed as they fell within the purview of the CBDT circular due to the low tax effect. The Revenue did not dispute the tax effect being below Rs. 50 lakhs.

What were the facts?

The Revenue filed appeals against the deletion of additions by the CIT(A) for assessment years 2007-08 and 2010-11. The assessee argued that the tax effect of the disputed additions was below Rs. 50 lakhs, making the appeals non-maintainable as per CBDT Circular No. 17 of 2019.

What were the issues?

Whether appeals filed by the Revenue are maintainable when the tax effect of the disputed additions is below the threshold prescribed by CBDT circulars.

Which sections of the Income-tax Act were involved?

Section 268A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD – BENCH ‘D’

Before: SHRI RAJPAL YADAV, VICE- & SHRI AMARJIT SINGH

Hearing: 09/10/2020Pronounced: 19/10/2020

PER RAJPAL YADAV, VICE-PRESIDENT Present two appeals are filed at the instance of the Revenue against orders of ld.CIT(A)-III, Ahmedabad of even dated i.e. 28.12.2012 passed for the Asstt.Years 2007-08 and 2010-11 respectively challenging deletion of additions by the CIT(A) as set out in the grounds of appeals.

1.

2. Before going to the merit of the cases, the ld.counsel for the assessee at the outset submitted that tax effect on the disputed additions in both the cases is below Rs.50 lakhs. Therefore, in view of this, he submitted that by virtue of recent CBDT Circular No.17 of 2019 dated 8.8.2019, Department has been instructed not to file appeal before the Tribunal where tax effect is below Rs.50 lakhs. This instruction is applicable to the pending cases also. Therefore, the present appeals of the Revenue are liable to be dismissed at the threshold. Per contra, the AND 583/ahd/2013 2 ld.DR did not dispute applicability of the recent CBDT circular and also tax effect being below Rs.50 lakhs in each of the cases. He, however, left the issue to the Tribunal to pass appropriate order in the matter.

3. After hearing both the sides and after perusal of the above CBDT Instruction, we are of the view that the present appeals of the Revenue fall within the purview of the CBDT Instruction cited (supra). It is not disputed by the Revenue that tax effect on the disputed total addition is less than Rs.50 lakhs, and therefore, keeping in view the above CBDT circular and provisions of section 268A of the Income Tax Act, we are of the view that the present appeals of the Revenue deserve to be dismissed. Both are accordingly dismissed.

However, it is observed that in case on re-verification at the end of the AO it can be demonstrated that the tax effect is more, or Revenue’s case falls within the ambit of exceptions provided in the Circular, then the Department will be at liberty to approach the Tribunal for recall of this order. Such application should be filed within the time period prescribed in the Act. In view of the above, the appeals of the Revenue are dismissed due to low tax effect.

4.

In the result, appeals of the Revenue is dismissed due to low tax effect. Order pronounced in the Court on 19th October, 2020 at Ahmedabad.

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