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Facts
The Revenue filed an appeal against the CIT(A)'s order quashing reassessment proceedings for AY 2018-19. The assessee filed a cross-objection, arguing that the Revenue's appeal was not maintainable as the tax effect (Rs. 31,21,284/-) was below the monetary limit (Rs. 60,00,000/-) for filing appeals before the ITAT, as prescribed by CBDT Circular No. 09/2024.
Held
The Tribunal found that the tax effect in the Revenue's appeal was indeed below the monetary threshold set by CBDT Circular No. 09/2024, and the Revenue failed to demonstrate that the case fell under any exceptions to this circular. Consequently, the Revenue's appeal was dismissed in-limine as not maintainable, and the assessee's cross-objection was allowed.
Key Issues
Whether the Revenue's appeal was maintainable before the ITAT when the tax effect was below the monetary limit specified by CBDT Circular No. 09/2024.
Sections Cited
148, 148A, 147, 144B, 151A, 130, 268A, 50CF
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Income Tax Appellate Tribunal, MUMBAI BENCH “B” MUMBAI
Before: SHRI OM PRAKASH KANT (ACCOUNTANT & SHRI RAJ KUMAR CHAUHAN
O R D E R Per O. P. Kant (A.M.)
This appeal by the Revenue and cross objection by the Assessee are directed against the order dated 28th April, 2025 passed by the Ld. Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre, Delhi [in short the Ld. CIT (A)] for Assessment Year 2018-19
The grounds raised
by the Revenue in its appeal are reproduced as under: -
1. On the facts and in the circumstances of the case and in law, whether the Ld.CIT(A) is correct in exercising constitutional power in quashing the notice u/s 148 and 148A and subsequent assessment order u/s 147 r.w.s 144B of the Act relying on the decision in the case of M/s. Hexaware Technologies Limited vs Assistant Assistant Commissioner of Income Tax. Circle-15(1)(2). Mumbai."
2. On the facts and in the circumstances of the case and in law, whether the Ld.CIT(A) is correct in quashing the notice u/s 148 and 148A and subsequent assessment order us 147 r.w.s 144B of the Act. disregarding the fact that the matter is subjudice as SLP has been filed on this issue before the Hon'ble Supreme Court and the same is pending."
3. On the facts and in the circumstances of the case and in law, the 3 Ld. CIT(A) erred in holding that the notices under section 148A(b) and 148 of the Act were invalid."
4. "On the facts and circumstances of the case and in law, the the Ld. CIT(A) is justified in quashing the orders passed under section 148A(d) and notices issued under section 148 by the JAO as per automated allocation and risk management strategies as per provisions of Section 151A read with section 1448 of the Income Tax Act."
5. On the facts and circumstances of the case and in law, the Ld. CIT(A) is correct in law in holding that the Section 151A of the Income Tax Act, r/w CBDT Notification No. 18 2022 dt. 29-03-2022 and Notification No. SO 1400(E) dt. 28.05.2022 issued u/s 130 of the Act mandate that the proceedings under Section 148A and notices u/s 148 shall only be Faceless, whereas the provisions of Sections 148A and 148 of the Act require enquiry and issue of notices by Assessing Officers.
6. On the facts and in the circumstances of the case and in law. whether the Ld.CIT(A) is correct in not adjudicating the appeal on merits pertaining to addition of Rs. 90,18,967/- made us 50CF of the Act.”
The grounds raised by the Assessee in its cross objection are reproduced as under: - “On the facts and circumstances of the case and in law, the Revenue erred in filing the appeal having tax effect amounting to Rs. 31,21,284/-, without considering that the monetary limit for filing an appeal before the Hon'ble Income Tax Appellate Tribunal as prescribed for the Revenue in Circular No. 9 of 2024 dated September 17, 2024, is Rs. 60,00,000/-.”
At the very threshold, the learned counsel for the assessee submitted that the tax effect involved in the present Departmental appeal is ₹31,21,284/–, which is well below the monetary limit of ₹60,00,000/– prescribed for filing appeals before the Tribunal by the Central Board of Direct Taxes (CBDT) vide Circular No. 09/2024 dated 17th September 2024. It was, therefore, argued that the appeal ought not to have been filed, and in any event, is liable to be dismissed as not maintainable in terms of the said Circular.
Per contra, the learned Departmental Representative contended that although the tax effect is below the prescribed monetary limit, but the present appeal falls within the exceptions carved out in Para 5 of the Circular (supra).
We have considered the rival submissions and examined the applicability of the CBDT Circular to the facts of the present case. The Circular No. 09/2024, issued under section 268A of the Act, mandates that no appeal shall be filed before the Tribunal where the tax effect does not exceed ₹60,00,000/–, except in situations enumerated in Para 5 namely:-
– matters involving constitutional validity; – cases requiring interpretation of a statutory provision; – cases where a Board’s order, notification, instruction, or circular has been held to be illegal; – matters having a cascading/recurring impact irrespective of tax effect; and – cases involving information from external agencies, etc.
In the present case, the Revenue has not placed on record any material to demonstrate that the impugned appeal falls within any of the exceptions carved out in Para 5 of CBDT Circular No. 09/2024. The tax effect involved is admittedly below the monetary threshold of ₹60,00,000/- prescribed for filing appeals before the Tribunal. In the absence of any substantiated plea regarding the applicability of an exception, the governing principle of low-tax-effect dismissal squarely applies. Nevertheless, it is clarified that the Revenue shall be at liberty to seek recall or restoration of the appeal, should it subsequently be established that the case is covered by any of the exceptions enumerated in the said Circular (supra).
Accordingly, the appeal of the Revenue is treated as withdrawn and dismissed in-limine as being barred by the monetary limits prescribed by the Board.
In the result, the cross-objection of the assessee is allowed, whereas the appeal of the Revenue is dismissed as withdrawn in terms of CBDT Circular No. 09/2024.