DCIT, CIR.1(1)(1), AHMEDABAD vs. ARCOY BIOREFINERY PRIVATE LIMITED, AHMEDABAD

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ITA 2462/AHD/2017Status: DisposedITAT Ahmedabad15 October 2019AY 2013-143 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 appeal was not maintainable as the tax effect was below the threshold limit prescribed by CBDT Circular No. 17/2019. The circular restricts the filing of appeals by the Revenue where the tax effect is below Rs. 50 lakhs.

What were the facts?

The Revenue filed an appeal against the CIT(A)'s order for AY 2013-14. The CIT(A) had deleted the reduction of loss claimed by the assessee. The appeal was filed before the ITAT.

What were the issues?

The primary issue was the maintainability of the Revenue's appeal before the ITAT due to low tax effect, as per CBDT guidelines.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 268A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD “B” BENCH

Before: Shri Rajpal Yadav & Shri Amarjit Singh

For Appellant: Shri Gulab M. Thakor, A.R
For Respondent: Shri Mudit Nagpal, Sr. D.R, Shri Gulab M. Thakor, A.R

Date of hearing : 27-09-2019 Date of pronouncement : 15-10-2019 आदेश/ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:-

This revenue’s appeal for A.Y. 2013-14, arises from order of the CIT(A)-1, Ahmedabad dated 31-08-2017, in proceedings under section 143(3) of the Income Tax Act, 1961; in short “the Act”.

2.

The grievance of the Revenue is that the ld. CIT(A) has erred in deleting the reduction of loss claimed by the appellant from Rs. 10,07,88,562/- to Rs. 9,07,88,562/- on account of rejection of books of accounts.

Page No 2 DCIT vs. Arcoy Biorefinery Pvt. Ltd.

3.

At the outset, after going through the grounds of appeal and the impugned orders of the Revenue authorities below, a query was raised by the Bench as to applicability and maintainability of the appeal filed by the Revenue in view of recent CBDT Circular No. 17/2019 dated 08-08-2019 restricting the filling of the appeal by the Revenue where the tax effect is below Rs.50 lakhs, the ld. DR did not dispute the same and submitted that the issue is left to the Tribunal to be decided in accordance with law.

4. We find that the appeal of the Revenue is presented on 7.11.2017. On 8.8.2019 the CBDT has issued Instructions bearing No. 17 of 2019 under file No. F. No. F. No. 279/Misc. 142/2007-ITJ(Pt.) prohibiting its subordinate authorities from filing of the appeal to the Tribunal against the order of the CIT(A) where the tax effect by virtue of the relief given by the CIT(A) is less than Rs.50 lakhs. The instructions have been made applicable with retrospective effect, meaning thereby, these instructions are applicable on pending appeals also. In the present case, “tax effect” on the total income assessed minus the tax that would have been chargeable had such total income been reduced by the amount of income in respect of the issue against which appeal is filed, is less than Rs.50 lakhs. Further, the case of the Revenue does not fall within the ambit of exceptions provided in the Circular. Thus, 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 accordingly dismissed.

However, it is observed that in case on re-verification at the end of the AO it comes to the notice 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 Page No 3 DCIT vs. Arcoy Biorefinery Pvt. Ltd. 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.

5.

In the result, the appeal of the Revenue is dismissed. Order pronounced in the open court on 15-10-2019

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