THE DCIT, CIRCLE-6, AHMEDABAD vs. SHRI JAYESHBHAI CHHAGANBHAI PATEL, AHMEDABAD

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ITA 137/AHD/2016Status: DisposedITAT Ahmedabad12 October 2018AY 2011-123 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The ITAT held that the appeal was to be dismissed as the tax effect of the disputed additions was below the threshold limit of Rs. 20 lakhs prescribed by the CBDT circular. This circular was applicable retrospectively to pending appeals.

What were the facts?

The Revenue filed an appeal before the ITAT against an order of the CIT(A) for AY 2011-12. The assessee did not appear before the tribunal. The primary issue revolved around the tax effect of the disputed additions.

What were the issues?

Whether the appeal filed by the Revenue is maintainable before the ITAT given the low tax effect, as per CBDT Circular No. 3 of 2018.

Which sections of the Income-tax Act were involved?

Section 268A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD – BENCH ‘A’

Before: SHRI RAJPAL YADAV & SHRI PRADIP KUMAR KEDIA

For Respondent: Shri O.P. Sharma, CIT-DR
Hearing: 11/10/2018Pronounced: 12/10/2018

PER RAJPAL YADAV, JUDICIAL MEMBER : This is Revenue’s appeal against the order of the ld.CIT(A)-4, Ambawadi, Ahmedabad dated 10.11.2015 passed for the assessment year 2011-12.

2.

None appeared on behalf of the assessee, therefore, we proceed to dispose of the appeal after hearing ld.DR and considering material available on record. In this appeal Revenue is aggrieved by action of the ld.CIT(A) in deleting various addition as set out in the grounds of appeal.

3.

At the outset Bench has enquired with the ld.DR, whether effective tax on aggregate of additions disputed by the assessee in this appeal is

ITA No.137/Ahd/2016 - 2 - below Rs.20 lakhs so as to attract recent CBDT Circular restricting filing of appeal by the Revenue before the Tribunal, where tax effect is below Rs.20 lakhs, the ld.DR did not contest the same and submitted that the issue is left to the Tribunal to be decided in accordance with law.

4.

We find that the appeal of the Revenue is presented on 19.1.2016. On 11.7.2018 the CBDT has issued Instruction bearing No. 3 of 2018 under file No.F.No.279/Misc.142/2007-ITJ(Pt) 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.20 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 quantum of additions contested by the Revenue does not exceed Rs.20 lakhs. As per the above Circular the “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.20 lakhs. Further, the case of the Revenue also 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

ITA No.137/Ahd/2016 - 3 -

in the Act. In view of the above, the appeal of the Revenue is dismissed due to low tax effect.

5.

In the result, the appeal of the Revenue is dismissed. Pronounced in the Open Court on 12th October, 2018.

Sd/- Sd/- (PRADIP KUMAR KEDIA) (RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER

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