THE DCIT(EXEMPTIONS), CIR-1, AHMEDABAD vs. GUJARAT COUNCIL OF SCIENCE CITY., AHMEDABAD

The Revenue is aggrieved by the action of the Id.CIT(A) in allowing accumulation of @15% of Rs.1,13,33,972/- under section 11(1)(a) of the Income Tax Act.

At the outset, when the Bench noticed that the tax effect on the disputed amount would be less than Rs.50 lakhs, it enquired with the ld.DR, whether appeal of the Revenue is hit by the latest CBDT Instruction No.17 of 2019 dated 8.8.2019, whereby Department has been instructed not to file appeal before the Tribunal where tax effect is below Rs.50 lakhs, he did not dispute applicability of the recent CBDT circular and left to the Tribunal to pass appropriate order in the matter.

In view of the above, we are of the view that the present appeal of the Revenue falls within the purview of the CBDT Instruction cited (supra) 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 15th October, 2019 at Ahmedabad.