ITO, WARD-13(1), KOLKATA vs. M/S WISE COMMOTRADE PVT LTD, KOLKATA

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ITA 388/KOL/2021Status: DisposedITAT Kolkata03 August 2022AY 2012-133 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 was not maintainable as the tax effect was less than Rs. 50 lakhs, as per CBDT Circular No. 17/2019. However, the Revenue was granted liberty to revive the appeal if further verification revealed exceptions to the circular or a higher tax effect.

What were the facts?

The Revenue filed an appeal before the ITAT against an order of the CIT(Appeals) for AY 2012-13. The assessee argued that the appeal was not maintainable due to CBDT Circular No. 17/2019, which prohibits appeals where the tax effect is below Rs. 50 lakhs.

What were the issues?

Whether the Revenue's appeal is maintainable before the ITAT in light of CBDT Circular No. 17/2019, considering the tax effect involved.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, ‘A(SMC

Before: Shri Rajpal Yadav, Vice-(KZ) & Shri Girish Agrawal

Per Rajpal Yadav, Vice-President (KZ):- The Revenue is in appeal before the Tribunal against the order of ld. Commissioner of Income Tax (Appeals)-7, Kolkata dated 19.03.2020 passed for the assessment year 2012-13.

2.

The ld. Counsel for the assessee, at the very outset, submitted that the appeal of the Revenue is not maintainable in view of the CBDT Circular No. 17/2019 dated 08.08.2019. By virtue of this Circular, it has been provided that where tax effect by virtue of relief given by the ld. CIT(Appeals) is less than Rs.50 lakhs, in those cases, Revenue Authorities are prohibited to file appeal before the Tribunal unless the case falls within the exceptions provided at Serial No. 8 of the Instructions. He 1

1.

Assessment Year: 2012-2013 M/s. Wise Commotrade Pvt. Limited pointed out that the case of the assessee does not fall in those Instructions and addition of Rs.32 lakhs was made with the aid of Section 68, i.e. share capital and premium received by the assessee.

3.

This appeal was listed on 1st of August, 2022. We have put to the ld. counsel for the assessee that there are subsequent Circulars issued by the Board on 6th of September, 2019 and 16th of September, 2019. Whether in those Circulars it has been provided that cases where bogus share premium or share capital is involved, would be covered by Circular No. 17 or not. The case was adjourned for today, i.e. 3rd of August, 2022. Ld. Counsel for the assessee has placed on record copies of six Circulars and Judgement of Hon’ble Gujarat High Court in the case of Principal Commissioner of Income Tax (Central) –vs.- Anand Natwarlal Sharda reported in 128 taxmann.com 376. He submitted that in none of the subsequent Circulars, it has been provided that these Instructions will not be applicable on the cases where share premium or share capital issues are involved. The Circular only includes those cases where short- term capital gains/long-term capital gains on penny stocks were claimed.

4.

Ld. Sr. D.R. of ‘SMC’ Bench all of a sudden fallen ill and stated to be admitted in the Hospital. The files were remained with him and not available. However, we have apprised the issue with ld. CIT(DR), who gone through these Circulars with us.

5.

On due consideration of the above facts and circumstances, we are of the view that the present appeal is not maintainable in view of the CBDT Circular No. 17/2019 because tax effect involved in the appeal is less than Rs.50 lakhs.

6.

However, we make it clear that since file is not available with the Revenue Officers present in the Court, in case on cross verification, it emerges out that either case of the assessee is not covered by Circular

Assessment Year: 2012-2013 M/s. Wise Commotrade Pvt. Limited No. 17 or on re-verification of the tax effect amount. It is found more than the limit available in the Circular, then Revenue will be at liberty to get its appeal revive by filing a Miscellaneous Application. This application is to be filed within the time limit provided in Section 254(2) of the Income Tax Act.

7.

In view of the above, the appeal of the Revenue is dismissed. Order pronounced in the open Court on August 3rd, 2022.

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