THE ITO, WARD-3(2)(2), AHMEDABAD vs. KESARISINGH KALUBHAI GOHIL, AHMEDABAD

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ITA 1411/AHD/2016Status: DisposedITAT Ahmedabad11 September 2018AY 2008-093 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 Tribunal held that the appeal of the Revenue was not maintainable as the tax effect was below the threshold stipulated by the CBDT circular. The circular was also applicable retrospectively to pending appeals.

What were the facts?

The Revenue filed an appeal against the deletion of an addition made under Section 69 of the Income Tax Act. The assessee argued that the appeal was not maintainable due to a CBDT circular restricting appeals with a tax effect below Rs. 20 lakhs.

What were the issues?

Whether the Revenue's appeal is maintainable before the ITAT given the tax effect being below the threshold specified in CBDT Circular No. 3/2018.

Which sections of the Income-tax Act were involved?

Section 69,Section 268A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD – BENCH ‘SMC’

Before: SHRI RAJPAL YADAV & SHRI WASEEM AHMED

For Respondent: Shri Kamlesh Makwana, Sr.DR, Shri Asam L. Thakkar, AR
Hearing: 10/09/2018

PER RAJPAL YADAV, JUDICIAL MEMBER : Revenue is in appeal before the Tribunal against order of the ld.CIT(A)-3, Ahmedabad dated 29.3.2016 for the assessment year 2008-09 challenging deletion of addition of Rs.42,77,500/- under section 69 of the Income Tax Act, 1961.

2.

At the outset, the ld.counsel for the assessee for the assessee pointed out that the appeal of the Revenue is not maintainable in view of recent CBDT Circular No.3/2018 dated 11.7.2018 restricting the filling of the appeal by the Revenue where the tax effect is below Rs.20 lakh. The tax effect on the disputed addition is below Rs.20 lakhs, therefore, appeal of the Revenue is liable to be dismissed. ld.DR did not dispute the

ITA No.1411/Ahd/2016 - 2 - submissions of ld.counsel for the assessee, but submitted that the issue is left to the Tribunal to be decided in accordance with law.

3.

We find that the appeal of the Revenue is presented on 26.5.2016. On 11.7.2018 the CBDT has issued Instructions 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, the disputed addition is of Rs.42,77,500/- under section 69 of the Act, and therefore, the “tax effect” as per CBDT Circular is tax 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, would be less than Rs.20 lakhs. Therefore, the present appeal of the Revenue is hit by the CBDT Circular and hence not maintainable. 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 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.1411/Ahd/2016 - 3 -

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

4.

In the result, the appeal of the Revenue is dismissed. Pronounced in the Open Court on 11th September, 2018.

Sd/- Sd/- (WASEEM AHMED) (RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER

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