THE DY. COMMISSIONER OF INCOME TAX, CIRCLE-1(1)(4), AHMEDABAD vs. M/S. DUKAAS FABRICS PVT. LTD., AHMEDABAD

The Revenue is aggrieved by the action of the Id.CIT(A) in deleting addition made by the AO under section 68 of the Act.

The Id.counsel for the assessee at the outset submitted that disputed addition in the present appeal is Rs.65,00,000/-, and therefore, Tax effect on the same is than Rs.50 lakhs. 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 appeal of the Revenue is liable to be dismissed at the threshold. The Id.DR, however, did not dispute applicability of the recent

After hearing both the sides and after perusal of the above CBDT Instruction, we are of the view that the present appeal of the Revenue falls within the purview of the CBDT Instruction cited (supra). It is not disputed by the Revenue that tax effect on the disputed addition is more 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 appeal of the Revenue deserves to be dismissed. It is 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 appeal of the Revenue is dismissed due to low tax effect.

In the result, appeal of the Revenue is dismissed due to low tax effect. Order pronounced in the Court on 24th September, 2019 at Ahmedabad.