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Facts
The Revenue filed an appeal against the deletion of an addition of Rs. 2,08,666/- made towards disallowance of VAT payments by the Assessing Officer. The deletion was made by the CIT(A)-NFAC. The core of the dispute revolves around whether the reopening of assessment under Section 147 was valid, based on information received from the Commercial Tax Officer regarding short VAT/CST payments.
Held
The Tribunal held that the information received from the Commercial Tax Officer regarding short payment of VAT/CST does not constitute information about an offense committed by the assessee. The short payment itself is not an offense, and the Assessing Officer had doubts about the genuineness of the payment. Therefore, the case did not fall under the exceptions provided by the CBDT circular for deciding appeals on merits.
Key Issues
Whether the reopening of assessment under Section 147 based on information of short VAT/CST payment from Commercial Tax Officer is valid, and whether the tax effect below monetary limits renders the appeal not maintainable.
Sections Cited
147, 43B, 133(6)
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Income Tax Appellate Tribunal, Hyderabad ‘ A ‘ Bench, Hyderabad
Before: Shri Vijay Pal Rao, Vice-Shri Manjunatha, G.
Per Vijay Pal Rao, Vice President
This appeal by the Revenue is directed against the order dated, 26/08/2024 of the learned CIT (A)-NFAC Delhi, for the A.Y.2012-13.
The Revenue has raised the following grounds of appeal:
As it is manifest from the grounds of appeal that, the only dispute in this appeal of the Department is regarding the addition made by the Assessing Officer of Rs.2,08,666/- towards disallowance of VAT payments was deleted by the learned CIT (A) and therefore, the tax effect in the appeal of the Revenue is less, then the monetary limit provided by the CBDT Circular No.9/2024 dated 17/09/2024 in Para 2 of the said circular as under:
The learned DR has submitted that the case of the assessee falls in the exception provided in Para 3.1 (a & b) of the CBDT Circular No.5/2024 dated, 15/03/2024 and therefore, the appeal of the Revenue should be decided on merits instead of on monetary limits.
On the other hand, the learned AR has submitted that the case of the assessee does not falls in the exception of Circular No.5/2024.
6. Since the Department has claimed that the present case falls in the exception provided in Para 3.1 and 3.2 of the CBDT Circular No.5/2024, therefore, the relevant para 3.1 of the said circular is reproduced for ready reference:
The Department has referred only sub-para (a) & (b) of Para 3.1, however, there is no issue involved in the case regarding
Page 3 of 5 the provisions of the Act or rules or notification as held to be constitutionally invalid or any order, instruction, or circular of the CBDT or the Govt. has been held to be illegal for ultra vires. Therefore, these 2 clauses i.e. a & b are not attracted in the present case. The Assessing Officer has referred in para 2 of the assessment order as under:
Thus, the assessment was reopened by the Assessing Officer on the basis of the information received from the Commercial Tax Officer regarding the short payment of VAT/CST by certain parties including the assessees. Thus, the mere information received from the Commercial Tax Officer regarding short payment of VAT/CST would not constitute an information in respect of an offence allegedly to have been committed by the Page 4 of 5 assessee under the law. The short payment of VAT/ CST would not itself is an offence. The Assessing Officer himself has doubted about the genuineness of the payment. Hence, we are of the considered view that this case does not fall even in exception provided in sub-para (c) of the para 3.1 of the CBDT Circular No.5/2024 as reproduced above. Accordingly, when the tax effect in the appeal of the Revenue is below the monetary limit provided in Circular No.9/2024, then the appeal of the Revenue is not maintainable and liable to be dismissed. We order accordingly.