INCOME TAX OFFICER, WARD-7-3, JAIPUR vs. M/S MAYUR LEATHER PRODUCTS LTD., JAIPUR

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ITA 1016/JPR/2018Status: DisposedITAT Jaipur28 January 2019AY 2012-135 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the tax effect in the Revenue's appeals did not exceed the limit specified in CBDT Circular No. 3/2018. The issue of Section 14A disallowance deleted by CIT(A) did not fall under the exceptions of the circular.

What were the facts?

The Revenue filed appeals against the CIT(A)'s relief granted on disallowances made under Section 14A. The assessee contended that the appeals were not maintainable due to low tax effect as per CBDT Circular No. 3/2018.

What were the issues?

Whether the Revenue's appeals are maintainable considering the low tax effect and the exceptions provided in CBDT Circular No. 3/2018.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JAIPUR BENCHES, JAIPUR

Before: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM

PER BENCH :

1.

These two appeals by the revenue and cross objections by the assessee are directed against two separate orders of the ld. CIT (A) both dated 25th June, 2018 for the assessment years 2012-13 and 2013-14 respectively. The effective ground raised by the revenue in both the appeals are as under :-

Assessment Year : 2012-13 :

“ On the facts and in the circumstances of the case, whether finding given by the ld. CIT (A) in giving relief of Rs. 8,10,209/- out of total disallowance of Rs. 8,23,209/- made u/s 14A r.w. Rule 8D, was not in contravention to the provisions of section 14A of the Income Tax Act, 1961 and clarification issued by the CBDT vide Circular 05/2014 dated 11.02.2014 ? Assessment Year : 2013-14 :

“ On the facts and in the circumstances of the case, whether finding given by the ld. CIT (A) in giving relief of Rs. 6,82,753/- out of total disallowance of Rs. 7,38,701/- made u/s 14A r.w. Rule 8D, was not in contravention to the provisions of section 14A of the Income Tax Act, 1961 and clarification issued by the CBDT vide Circular 05/2014 dated 11.02.2014 ?

2.

We have heard the ld. D/R and considered the written submissions filed by the assessee. At the outset, we note that the tax effect in both the appeals of the revenue is not exceeding the limit provided under CBDT Circular No. 3/2018 dated 11th July, 2018, therefore, the question of maintainability of the revenue’s appeal does arise. The ld. D/R has not disputed the fact that the tax effect involved in both the appeals is not exceeding Rs. 20 lacs. However, he has submitted that the common issue involved in both the appeals is regarding disallowance made under section 14A which was deleted by the ld. CIT (A), therefore, the issue falls in the exception under para 10(b) of the CBDT Circular No. 3/2018. The assessee has submitted in the written submission that the appeals of the revenue are not maintainable due to the low tax effect in view of the Circular No. 3/2018 dated 11th July, 2018. Further, the issue of section 14A does not fall in the exception as per para 10(b) of the Circular. Thus the assessee has contended that the appeals of the revenue are liable to be dismissed being not maintainable. As regards the Cross Objections, the assessee is only supporting the order of the ld. CIT (A) and no new issue is raised. The assessee has also relied upon the decision of this Tribunal dated 31st October, 2018 in case of DCIT vs. Mayur Leather Products Ltd. in ITA No. 1109/JP/2018.

3.

Having considered the rival submissions as well as the relevant material on record, at the outset, we note that the tax effect in both the revenue’s appeals is not exceeding the limit provided under CBDT Circular no. 3/2018 and this fact is not disputed by the ld. D/R. As regards the matter falls in the exception under section 10(b) of the CBDT Circular, we find that the issue of disallowance made under section 14A which was deleted by the ld. CIT (A) does not involve any notification, instruction or circular issued by the CBDT which has been held to be illegal or ultra vires. Therefore, in our considered view, the present appeals of the revenue are not covered by the exception given in para 10(b) of the CBDT Circular No. 3/2018.

Accordingly, the appeals of the department are not maintainable and liable to be dismissed.

4.

As regards the Cross Objections, the assessee has not raised any new ground in the cross objections but the cross objections are in support of the order of the ld. CIT (A). Hence, in view of the appeals of the revenue are dismissed, the cross objections become infructuous and liable to be dismissed.

5.

In the result, both the appeals of the revenue and cross objections of the assessee are dismissed.

Order is pronounced in the open court on 28/01/2019.

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