THE DCIT, CIRCLE-2(1)(1),, AHMEDABAD vs. HDB FINANCIAL SERVICES LIMITED,, AHMEDABAD

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

We find that the appeal of the Revenue is presented on 8.9.2016. On 8.1.2016 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.31,56,766/- under section 14A 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.

In the result, the appeal of the Revenue is dismissed. Pronounced in the Open Court on 13th August, 2018.