ITO 3(1) (3), MUMBAI vs. M/S. EMERGING STAR INVESTMENT PVT. LTD, MUMBAI

ORDER PER AMARJIT SINGH, A.M. The present appeal is filed by the Revenue is directed against the order passed by the Ld. Commissioner of Income Tax (Appeals)-8, Mumbai [in short ‘CIT(A)’], which in turn arises from the assessment order passed by the AO u/s 143(3) r.w.s. 147 of the Income Tax Act, 1961, dated 28.12.2017 for the assessment year (AY) 2010-11. 2. At the outset, after going through the grounds of appeal and the impugned orders of the Revenue authorities below, a query was raised by the Ld. counsel as to applicability and maintainability of the appeal filed by the Revenue in view of recent CBDT Circular No. 17/2019 dated 08.08.2019 M/s Emerging Star Investments Pvt. Ltd. 2 restricting the filling of the appeal by the Revenue where the tax effect is below Rs.50 lakhs. The Ld. counsel submitted in the submission dated 01.02.2022 that tax effect in the case under consideration is ₹36,80,575/-. The Ld. Departmental Representative (DR) did not dispute the same and submitted that the issue is left to the Tribunal to be decided in accordance with law.

3. On 08.08.2019 the CBDT has issued Instructions bearing No. 17 of 2019 prohibiting its subordinate authorities from filing of the appeal to the Tribunal against the order of the CIT(A) where the tax effect by virtue of the relief given by the CIT(A) is less than Rs.50 lakhs. The instructions have been made applicable with retrospective effect, meaning thereby, these instructions are applicable on pending appeals also. In the present case, “tax effect” on the total income assessed minus the tax that would have been chargeable had such total income been reduced by the amount of income in respect of the issue against which appeal is filed, is less than Rs.50 lakhs. Further, the case of the Revenue does not fall within the ambit of exceptions provided in the Circular. 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 present 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. In view of the above, the appeal of the Revenue is dismissed due to low tax effect.

M/s Emerging Star Investments Pvt. Ltd. 3