THE ACIT, CENTRAL CIRCLE-1(1), AHMEDABAD vs. M/S. NAVRATNA ORGANISERS & DEVELOPERS PVT. LTD., AHMEDABAD

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ITA 2633/AHD/2011Status: DisposedITAT Ahmedabad18 January 2019AY 1997-982 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the appeal of the Revenue deserves to be dismissed on account of low tax effect, as the tax effect was less than Rs. 20 lakhs. The Department was given liberty to approach for recall if re-verification shows otherwise.

What were the facts?

The Revenue appealed against the deletion of an addition of Rs. 35,91,717 made by the AO under Section 68. The assessee argued that the appeal should be dismissed due to low tax effect as per CBDT Circular No. 3 of 2018.

What were the issues?

Whether the Revenue's appeal is maintainable before the Tribunal given the low tax effect and the CBDT circular on the subject.

Which sections of the Income-tax Act were involved?

Section 68,Section 268A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, AHMEDABAD

Before: SHRI RAJPAL YADAV & SHRI AMARJIT SINGH

Hearing: 31/10/2018Pronounced: 18/01/2019

PER RAJPAL YADAV, JUDICIAL MEMBER: Revenue is in appeal before the Tribunal against order of ld.CIT(A)-1, Ahmedabad dated 30.8.2011 passed the Asstt.Year 1997-98.

2.

Only ground in this appeal relates to deletion of addition of Rs.35,91,717/- made by the AO under section 68 of the Income TaxACt.

3.

The ld. counsel for the assessee submitted that the appeal of the Revenue deserves to be dismissed on account of low tax effect involved in it. He submitted that the CBDT has issued a circular bearing no.3 of 2018 dated 11.08.2018, vide which it has prohibited its authorities not to file appeal

ITA No.2633/Ahd/2011 2 before the Tribunal, if tax effect by virtue of relief given by the CIT(A) is less than Rs.20 lakhs. On deletion of impugned addition tax effect will be less than Rs.20 lakhs, and therefore, the present appeal is not maintainable in view of the above CBDT Circular. Further, ld.DR has not pointed out whether the case of the Revenue fall within the ambit of exceptions provided in the Circular or not. 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 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 to approach the Tribunal for recall of this order. Such application should be filed within the time period prescribed in the Act.

3.

In the result, appeal of the Revenue is dismissed due to low tax effect. Order pronounced in the Court on 18th January, 2019 at Ahmedabad.

Sd/- Sd/- (AMARJIT SINGH) (RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER

Ahmedabad; Dated 18/01/2019

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