What did the Tribunal hold?

The Tribunal held that the Revenue's appeal was not maintainable due to the low tax effect, as it fell below the enhanced monetary limit prescribed by the CBDT circular. The circular was applicable to pending appeals.

The Revenue appealed the CIT(A)'s order deleting an addition related to future and option loss due to client code modification. The assessee argued the appeal should be dismissed due to low tax effect, citing a CBDT circular enhancing monetary limits for appeals.

What were the issues?

The primary issue was whether the Revenue's appeal was maintainable before the Tribunal given the low tax effect in light of a recent CBDT circular.

ACIT vs Shri. Anand B Gupta | ITAT Mumbai 2021

Income Tax Appellate Tribunal, “A” BENCH, MUMBAI

Before: SHRI M. BALAGANESH, AM & SHRI PAVAN KUMAR GADALE, JM Shri Anand B. Gupta

For Appellant: Shri Mehul B. Jain

For Respondent: Shri Tejas Sodha

Pronounced: 10.11.2021

By way of this appeal, the revenue has challenged correctness of the order dated 27.09.2019 passed by the learned CIT(A)-41, Mumbai for the assessment year 2010-11.

Grounds raised by the revenue are as follows:-

(i) " On the facts and circumstances of the case, the Ld. CIT(A) has erred in directing the Assessing Officer to delete the addition made on disallowance of future and option loss aggregating a sum of Rs.6,44,192/- due to client code modification." (ii) "On the facts and circumstances of the case, the Ld. CIT(A) has failed to appreciate the fact that the client code modification done without the knowledge of the assessee and consent is untenable and devoid of merit." (iii) The appellant prays that the order of the CIT(A) on the above grounds be set aside and that the order of the AO be restored. (iv) The appellant craves leave to amend or alter any ground or add new ground, which may be necessary.

(Assessment Year: 2010-11) Asst. CIT vs. Shri Anand B. Gupta 3. When this appeal was called out for hearing, learned counsel for the assessee submitted that the present appeal of the Revenue needs to be dismissed on account of low tax effect in view of the recent CBDT Circular No. 17 of 2019 dated 08.08.2019 whereby the monetary limits for filing the appeal by the Revenue before the Tribunal was enhanced from Rs.20 lakhs to Rs.50 lakhs. This instruction is applicable to the pending cases also.

The learned Departmental Representative fairly admitted that the tax effect involved in this appeal is less than the limit prescribed by the aforesaid CBDT Circular.

We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of applicable legal position. As learned counsel rightly contends, this appeal of the Revenue is no longer maintainable in view of the recent CBDT Circular No. 17 of 2019 dated 08.08.2019. The mandatory limit for cases in which Revenue can challenge the relief granted by the CIT(A) now stands enhanced to Rs.50 lakhs. This concession granted by the Central Board of Direct Taxes (CBDT) is retrospective in effect inasmuch as it applies to all pending appeals as well. In view of the above position, the appeal of the Revenue is no longer maintainable and must be dismissed as such.

It is, however, made clear that on re-verification at the end of the Assessing Officer it comes out that the tax effect of more than Rs.50 lakhs is being involved in the appeal or the appeal falls within the exception clause of the Circular, then the Revenue will be at liberty to file Miscellaneous Application to recall the Tribunal order. The application should be filed within time limit prescribed in the Act.

(Assessment Year: 2010-11) Asst. CIT vs. Shri Anand B. Gupta 7. In the result, appeal of the Revenue is dismissed due to low tax effect.

Order pronounced in the open court on 10/11/2021

ASST CIT 30(1), MUMBAI vs. SHRI. ANAND B GUPTA, MUMBAI

What did the Tribunal hold?

What were the facts?

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