What did the Tribunal hold?

The Tribunal held that the appeal was not maintainable as the tax effect, excluding Education Cess, was below the threshold limit specified by CBDT Circular No. 09/2024. The Revenue was granted liberty to seek re-institution if exceptions applied.

The Revenue appealed against the deletion of an addition of Rs. 79,75,000/- by the CIT(A). The assessee argued that the tax effect was below the revised threshold limit of Rs. 60 lacs due to the exclusion of Education Cess.

What were the issues?

Whether the appeal filed by the Revenue is maintainable due to low tax effect, considering the exclusion of Education Cess from the computation of tax effect.

ITO vs Rainbow Diamonds Pvt Ltd | ITAT Delhi 2026

Income Tax Appellate Tribunal, DELHI “E” BENCH: NEW DELHI

Before: SHRI MAHAVIR SINGH & SHRI MANISH AGARWAL

For Appellant: Ms. Ankush Kalra, Sr. DR

Hearing: 23.04.2026Pronounced: 30.04.2026

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “E” BENCH: NEW DELHI BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT & SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.7759/Del/2025 [Assessment Year : 2017-18] Income Tax Officer, Vs Rainbow Diamonds Pvt. Ward 21(1), Ltd., 1171, 1st Floor, Room No.220, Kucha Mahajan, Chandani CR Building, IP Estate, Chowk, New Delhi-110006 PAN:AACCR0170P New Delhi-110002 APPELLANT RESPONDENT Appellant by Ms. Ankush Kalra, Sr. DR Respondent by S/Sh. P.C. Yadav, R.K. Vashisth & Manish Yadav, Advs. Date of Hearing 23.04.2026 Date of Pronouncement 30.04.2026 ORDER PER MANISH AGARWAL, A.M. : The captioned appeal is filed by the Revenue against the order of the ld. Commissioner of Income Tax (Appeals, National Faceless Appeal Centre, (NFAC) New Delhi (‘CIT(A)’ in short) dated 30.09.2025 arising from the assessment order passed by the Assessing Officer dated 30.12.2019 under Section 143(3) of the Income Tax Act (‘the Act’ in short) for AY 2017-18.

The Revenue has raised following ground of appeal:-

ITA No.7759/Del/2025 1. “Whether the learned CIT(A) erred in deleting the addition of Rs 79,75,000/- disregarding the detailed analysis made by the Assessing officer showing abnormal sales pattern and abnormal cash in hand/cash deposit pattern. 2. Whether the Ld.' CIT(A) has erred in deleting the addition on the basis of self-serving documents without appreciating that self-serving documents cannot substitute for independent evidence. 3. The appellant craves to be allowed to add any fresh ground(s) of appeal and or deleted or amend any of the ground(s) of appeal.”

Before us, ld. AR for the assessee submits that in the instant case the tax effect is less than the threshold limit of Rs. 60.00 lacs as per CBDT Circular No.09/2024 dated 17.09.2024 however, the AO while calculating the tax Rs. 61,60,687/- has included Education Cess @ 3%. As per ld. AR if the Education Cess is excluded, the total tax effect would be Rs. 59,81,250/-. Ld. AR placed reliance on the judgement of Co-ordinate Bench of Hyderabad Tribunal in MA No. 35/HYD/2017 wherein the Co-ordinate bench has relied upon the judgement of Hon’ble Jurisdictional High Court in the case of Dalmia Cement (Bharat) Ltd. Vs. CIT reported in 357 ITR 419 (Delhi) wherein the Hon’ble High Court has held that Education Cess is not part of the tax. Accordingly, ld. AR submits that the appeal of the revenue is not maintainable due to low tax effect.

On the other hand, Ld. Sr. DR for the Revenue stated that the Education Cess is part of the tax and thus the AO is correct in including the same in the total tax computed for the purpose of computing the tax effect. He prayed accordingly.

ITA No.7759/Del/2025 5. Heard the parties and considered submissions made. The CBDT vide Circular No. 9/2024 dated 17.09.2024 has revised the monetary limit for filing the appeals before the Tribunal to Rs. 60 Lacs and further clarified that Circular No.9/2024 would be applicable to all pending appeals. In such circumstances, the present appeal filed by the Revenue being of low tax effect is not maintainable.

Before parting, we clarify here that the Revenue shall be at liberty to approach the Tribunal for re-institution of appeal, if the requisite material is brought to show that the appeal is protected by the exceptions prescribed or tax effect is above the maximum limit provided in the aforesaid circular.

In the result, appeal of the Revenue is dismissed. Order pronounced in the open Court on 30.04.2026. Sd/- Sd/-

(MAHAVIR SINGH) (MANISH AGARWAL) VICE PRESIDENT ACCOUNTANT MEMBER Date :- 30.04.2026 * Amit Kumar, Sr.P.S * Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI

ITO, DELHI vs. RAINBOW DIAMONDS PVT LTD, DELHI

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