What did the Tribunal hold?

The Tribunal held that as per departmental instructions (Circular No. 3/2018), appeals with a tax effect below Rs. 20 lakhs should not be filed or should be withdrawn. Therefore, the appeal was dismissed on this technical ground.

The Revenue filed an appeal before the ITAT, Cuttack, for the assessment year 2014-15. The tax effect involved in the appeal was admittedly less than Rs. 20 lakhs.

What were the issues?

Whether the Revenue's appeal should be dismissed on the grounds of low tax effect, as per departmental circulars, without adjudicating on the merits of the case.

ACIT vs M/S. Shree Niladree Udyog, Puri | ITAT Cuttack 2019

Income Tax Appellate Tribunal, CUTTACK BENCH, CUTTACK

Before: SHRI CHANDRA MOHAN GARG, JM & SHRI L.P. SAHU, AM

Hearing: 26/07/2019Pronounced: 26/07/2019

आयकर अपीऱीय अधिकरण, कटक न्यायपीठ,कटक IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH, CUTTACK श्री चन्द्र मोहन गगग, न्द्याययक सदस्य एवं श्री एऱ.ऩी.साहु, ऱेखा सदस्य के समऺ । BEFORE SHRI CHANDRA MOHAN GARG, JM AND SHRI L.P. SAHU, AM आयकर अऩीऱ सं./ITA No.367/CTK/2017 (नििाारण वषा / Assessment Year :2014-2015) ACIT, Circle-5(1), Bhubaneswar Vs. M/s Shree Niladree Udyog, Hotel Shree Hari, New Marine Road, Puri, Odisha-752001 स्थायी ऱेखा सं./ जीआइआर सं./ PAN/GIR No. : ABFFS 0167 C (अऩीऱाथी /Appellant) (प्रत्यथी / Respondent) .. राजस्व की ओर से /Revenue by : Shri Subhendu Dutta, DR यनधागररती की ओर से /Assessee by : Shri B.K.Mohapatra, Advocate सुनवाई की तारीख / Date of Hearing : 26/07/2019 घोषणा की तारीख/Date of Pronouncement 26/07/2019 आदेश / O R D E R Per L.P.Sahu, AM: This appeal is filed by the Revenue against the order passed by learned CIT(A)-2, Bhubaneswar for the assessment year 2014-15. 2. Heard both the parties and perused the record. 3. During the course of hearing, the Ld. DR submitted that there is no doubt that tax effect involved in the appeal is less than Rs.20 lakhs, thus, bound by the departmental instruction, the appeal has to be withdrawn. However, attention was invited to para 10 of the Circular No. 3/2018, dated 11th July, 2018, which has been modified by Circular dated 20th August, 2018 and in terms of the said modification the Departmental Representatives made a prayer that permission to pray for recall of the

2 ITA No.367/CTK/2017 order may be granted in case any of the conditions in the reports made available by the A.O. subsequently, show that the issues were required to be contested. The modified para is extracted hereunder: “10. Adverse judgments relating to the following issues should be contested on merits notwithstanding that the tax effect entailed is less than the monetary limits specified in para 3 above or there is no tax effect: (a) Where the Constitutional validity of the provisions of an Act or Rule is under challenge, or (b) Where Board's order, Notification, Instruction or Circular has been held to be illegal or ultra vires, or (c) Where Revenue Audit objection in the case has been accepted by the Department, or (d) Where addition relates to undisclosed foreign income/undisclosed foreign assets (including financial assets)/ undisclosed foreign bank account. (e) Where addition is based on information received from external sources in the nature of law enforcement agencies such as CBI/ED/DRI/SFIO/ Directorate General of GST Intelligence (DGGI). (f) Cases where prosecution has been filed by the Department and is pending in the Court. ”

Going by the prescription of Circular No. 3/2018, dated 11th July, 2018, we are of the view that the Revenue should have either not filed the instant appeal before the Tribunal or withdrawn the same as the tax effect in the appeal is admittedly less than the prescribed limit, i.e., Rs. 20,00,000/- for not filing the appeals. Accordingly, we dismiss the appeal filed by the Revenue without going into merits of the case. However, it is made clear that the Department is at liberty to file Miscellaneous Application, if the tax effect is found to be more than the prescribed limit of Rs.20,00,000/- or any of the conditions etc., as available in the

3 ITA No.367/CTK/2017 amendment carried out in para 10 of Circular No. 3/2018, dated 20.08.2018, is made out. Accordingly, the appeal of the Revenue deserves to be dismissed. 5. In the result, the appeal of the Revenue is dismissed. Order pronounced in the open court on 26/07/2019. Sd/- Sd/- (C.M.GARG) (L.P.SAHU) न्यानयक सदस्य / JUDICIAL MEMBER ऱेखा सदस्य / ACCOUNTANT MEMBER कटक Cuttack; ददनांक Dated 26/07/2019 प्र.कु.मम/PKM, Sr.P.S. आदेश की प्रनिलऱपप अग्रेपषि/Copy of the Order forwarded to : 1. अऩीऱाथी / The Appellant- . ACIT, Circle-5(1), Bhubaneswar प्रत्यथी / The Respondent- 2. M/s Shree Niladree Udyog, Hotel Shree Hari, New Marine Road, Puri, Odisha-752001 3. आयकर आयुक्त(अऩीऱ) / The CIT(A), 4. आयकर आयुक्त / CIT 5. ववभागीय प्रयतयनधध, आयकर अऩीऱीय अधधकरण, कटक / DR, ITAT, Cuttack 6. गार्ग पाईऱ / Guard file. सत्यावऩत प्रयत //True Copy// आदेशािुसार/ BY ORDER,

(Senior Private Secretary) आयकर अपीऱीय अधिकरण, कटक / ITAT, Cuttack

ACIT, CIRCLE-5(1), BHUBANESWAR vs. M/S. SHREE NILADREE UDYOG, PURI

What did the Tribunal hold?

What were the facts?

What were the issues?

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