THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-5(1), VISAKHAPATNAM vs. VIZAG COMPANY STEEL, VISAKHAPATNAM

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ITA 531/VIZ/2018Status: DisposedITAT Visakhapatnam08 January 2020AY 2009-104 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the tax audit objection did not qualify as an exception to the CBDT circular regarding tax effect. Consequently, the appeal was to be decided based on the monetary limits specified in the circular.

What were the facts?

The Revenue appealed an order of the CIT(A) for AY 2009-10. The assessee argued that the appeal was not maintainable due to low tax effect, citing CBDT Circular No. 17/2019. The Department sought to raise an additional ground based on a tax audit objection.

What were the issues?

Whether the appeal is maintainable based on the tax effect and CBDT circulars, and whether a tax audit objection constitutes an exception to these circulars.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 263

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, VISAKHAPATNAM “SMC” BENCH, VISAKHAPATNAM

Before: SHRI V. DURGA RAO, HON’BLE

For Appellant: Shri K.S.S. Sarma – CA
For Respondent: Smt. Mini Chandran – Sr.DR
Hearing: 19/12/2019

Date of hearing : 19/12/2019. Date of pronouncement : 08/01/2020. O R D E R This appeal by the Revenue is directed against the order of Commissioner of Income Tax (Appeals)-2, Visakhapatnam, dated 12/07/2018 for the Assessment Year 2009-10.

2.

When this appeal is taken up for hearing, ld.AR has submitted that tax effect involved in this appeal is below Rs. 50.00 lakhs and as per CBDT Circular No. No.17/2019, dated 08/08/2019, this appeal is not maintainable.

3.

On the other hand, ld.DR has raised an additional ground and submitted that the Department has accepted the tax audit objection and as per para 10(c) of CBDT Circular No. 03/2018, dated 11/07/2018, it is an exception to the circular and therefore the case has to be decided on merits.

4.

The technical issue for consideration before us is whether the tax audit objection can be considered as objection in respect of tax effect in this case or not.

5.

Facts in brief are that in this case audit party had taken an objection on 09/10/2012. Based on the audit objection, the ld.Commissioner by exercising his powers conferred in him u/sec. 263 passed an order dated 27/03/2014 and directed the Assessing Officer to redo the assessment. In pursuant to the order passed by the ld. CIT, the Assessing Officer has passed the order u/sec. 143(3) r.w.s. 263 dated 05/03/2015. On appeal, ld. CIT(A) allowed the appeal of the assessee. The grounds of appeal

before us are only the order passed by the Assessing Officer under 143 r.w.s. 263 dated 05/03/2015 is correct or not. In my opinion, once audit objection has been considered and in pursuance to that, 263 order is passed, there ends the matter. The order passed by the Assessing Officer u/sec. 143(3) r.w.s. 263 is in pursuance to the directions given by the ld.Commissioner on account of his earlier order is erroneous and prejudicial to the interest of the Revenue, therefore audit objection does not come as an exception in the present case. Therefore, the additional ground filed by the Department is rejected. According to me, this case has to be decided as per CBDT Circular No. No.03/2018, dated 11/07/2018 without considering the exception as provided under para 10(c) of the circular. I find that tax effect involved in this appeal is below Rs. 50.00 lakhs. Ld.DR has not raised by objection in respect of involvement of tax effect. In view of the CBDT Circular No.17/2019, dated 08/08/2019, which was followed by Notification No.279/Misc/M-93/2018-ITJ, dated 20/08/2019 wherein clarified that the revised monetary limits mentioned in Circular No.17/2019 are applicable to all pending appeals also, this appeal filed by the Revenue is not maintainable and is dismissed accordingly.

6. In the result, appeal filed by the Revenue is dismissed. Order Pronounced in open Court on this 08th day of Jan., 2020.

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