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Facts
The Revenue filed an appeal against the CIT(A)'s order for AY 2008-09, which had partly allowed the assessee's appeal against an assessment order. The original assessment involved additions under Section 14A and disallowance of interest under Section 36(1)(iii). The Revenue's current appeal was filed with a delay of 115 days, which the Tribunal condoned.
Held
The Tribunal dismissed the Revenue's appeal due to a low tax effect of ₹59,74,742/-, which falls below the ₹60,00,000/- monetary limit stipulated by CBDT Circular No. 9 of 2024 for filing appeals before the Tribunal. The Revenue was granted liberty to file a Miscellaneous Application for recall if it is later found that the tax effect exceeds the limit or the case falls under specified exceptions.
Key Issues
Whether the CIT(A) was justified in deleting the disallowance of interest under Section 36(1)(iii) and allowing relief under Section 14A, and whether the Revenue's appeal was maintainable given the low tax effect.
Sections Cited
250, 254, 251, 143(3), 148A, 36(1)(iii), 14A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, KOLKATA ‘B’ BENCH, KOLKATA
Before: SHRI GEORGE MATHAN & SHRI RAKESH MISHRA
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
This appeal filed by the Revenue is against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2008-09 dated 30.03.2023, which has been passed against the assessment order u/s 254/251/143(3) of the Act, dated 29.03.2019. 1. 1. The Registry has informed that the appeal filed by the Revenue is barred by limitation by 115 days. An application seeking condonation of delay has been filed by the Revenue stating as under: I.T.A. No.: 1025/KOL/2023 Assessment Year: 2008-09 Emami Realty Limited. “It is submitted that the appeal could not be filed on or before due date due to huge work load relating to time barring assessment, penalty and writ filed by the various assessee on the issue of 148A proceedings. Therefore, it is requested to kindly condone the delay of 115 days in filing appeal before the Hon'ble ITAT, Kolkata for the sake of substantial justice.”
Considering the application for condonation of delay and the reasons stated therein, we are satisfied that the Revenue had a reasonable and sufficient cause and was prevented from filing the instant appeal within statutory time limit. We, therefore, condone the delay and admit the appeal for adjudication.
The Revenue is in appeal before the Tribunal raising the following grounds of appeal:
“1. Whether on the facts and circumstance of the case, the Ld. CIT(A) was justified in deleting the disallowance of interest of Rs 1,77,54,031/- made u/s 36(1)(iii) of the Act.
Whether on the facts and circumstance of the case, the Ld. CIT(A) was justified in holding that the investments to the tune of Rs 36,76,23,629/- made in different concerns including subsidiary companies and associates made of the loan fund was for business purpose and the interest of Rs 1,77,54,031/- paid on such amount was an allowable expenditure u/s 36(1)(iii) of the Act.
Whether on the facts and circumstance of the case, the Ld. CIT(A) was justified in allowing relief u/s 14A of the Act ignoring board circular and amended provisions of that.
That the appellant craves leave to add to and/or alter, amend, modify or rescind the grounds herein above before or hearing of this appeal.”
Brief facts of the case are that the assessee is a company. As per Form No. 35, the assessee company has since been amalgamated with Emami Infrastructure Limited having PAN ALCS5120P. Emami Infrastructure Limited had later been renamed as Emami Realty Ltd. Before merger the PAN of Emami Realty Limited was AABCE6823B. The assessee company is engaged in real estate business. In the instant case I.T.A. No.: 1025/KOL/2023 Assessment Year: 2008-09 Emami Realty Limited. the assessment u/s 143(3) of the Act was passed on 30.12.2010 at total income of ₹1,66,35,730/-. The Assessing Officer (hereinafter referred to as Ld. 'AO') made addition u/s 14A of the Act at ₹7,08,409/- and disallowance of ₹1,77,54,031/- and disallowance of club fees expenses of ₹5,000/-. The assessee company had gone for appeal before the Ld. CIT(A)-2, Kolkata against the Ld. AO’s order dated 30.12.2010. The Ld. CIT(A) passed order on 21.02.2014 and directed to delete the addition of ₹1,77,54,031/- under the head ‘disallowance of interest’. Further, the Department filed an appeal before the Hon'ble ITAT, Kolkata on account of disallowance of interest u/s 36(1)(iii) of the Act as well as cross objections filed by the assessee in respect of the disallowance u/s 14A of the Act. While giving judgement, the Hon’ble ITAT allowed the appeal of the Revenue on technical ground by holding that the factual finding would be necessary to determine the fact of utilization of borrowed funds for the business purposes which will in turn be essential to determine the allowability of interest u/s 36(1)(iii) of the Act and in respect of disallowance u/s 14A of the Act, the Hon’ble ITAT allowed it partly. The Department preferred an appeal before the Hon’ble High Court in this regard. In view of the ITAT’s order, the Ld. AO passed order u/s 254/251/143(3) of the Act on 29.03.2019 and computed the assessee’s loss at ₹(-)14,69,550/-. Aggrieved with the assessment order, the assessee preferred an appeal before the Ld. CIT(A), who vide the impugned order partly allowed the appeal.
Aggrieved with the order of the Ld. CIT(A), the Revenue has filed the appeal before this Tribunal.
Rival contentions were heard and the submissions made have been examined. During the course of appeal, the Ld. AR sought I.T.A. No.: 1025/KOL/2023 Assessment Year: 2008-09 Emami Realty Limited. adjournment as the Form No. 36 which was received was not legible and requested that the same was given as was directed by the Tribunal earlier. The Ld. AR showed a copy of Form No. 36 which is reproduced at page 27 of the paper book filed on 25.08.2025 in which the grounds of appeal were not even mentioned. However, it was noted by the Bench and was pointed out by the Ld. AR that the tax effect in this case is only ₹59,74,742/-.
It is pertinent to note that the tax effect by virtue of relief given by the first appellate authority is less than ₹60,00,000/- as mentioned in Col. No. 10 of Form No.
The Ld. AR objected to the admission of the appeal as the tax effect is stated to be ₹59,74,742/- which is below ₹60,00,000/-. As per the CBDT’s Circular No. 9 of 2024 issued on 17th September, 2024, the CBDT has directed its subordinate authorities not to file appeal against the order of the Ld. CIT(Appeals) before the Tribunal if the tax effect by virtue of relief given by the Ld. CIT(Appeals) is less than ₹60,00,000/-. Such order could only be challenged if it comes within the exceptions provided in the Instruction. Ld. Sr. DR could not rebut this fact nor could he demonstrate how the appeal was covered under any of the exceptions; therefore, this appeal is not maintainable.
On due consideration of the above facts and circumstances, we dismiss this appeal of the Revenue on account of low tax effect. However, in case on re-verification of the facts at the end of the Ld. Assessing Officer, it emerges that the tax effect is more than the limit for filing the appeal or this case falls under any of the exceptions provided in the instruction, then the Revenue will be at liberty to file a Miscellaneous Application for recall of this order and revival of the I.T.A. No.: 1025/KOL/2023 Assessment Year: 2008-09 Emami Realty Limited. appeal. Such an application should be filed within the time limit provided in the Act.
In the result, the appeal of the Revenue is dismissed. Order pronounced in the open Court on 8th September, 2025. [George Mathan] [Rakesh Mishra] Judicial Member Accountant Member Dated: 08.09.2025 Bidhan (Sr. P.S.) I.T.A. No.: 1025/KOL/2023 Assessment Year: 2008-09 Emami Realty Limited. Copy of the order forwarded to:
Deputy Commissioner of Income Tax, Circle-V(I), Kolkata
Emami Realty Limited, Acropolish 13th floor, 1858/1, Rajdanga main road, Kolkata, West Bengal, 700107. 3. CIT(A)-NFAC, Delhi.
CIT-
CIT(DR), Kolkata Benches, Kolkata.
Guard File. //// By order