DCIT, NEW DELHI vs. M/S MINDA VALEO SECURITIES SYSTEMS PVT. LTD.,, NEW DELHI

(A) This appeal by Revenue is filed against the order of Learned Commissioner of Income Tax (Appeals)- 33, New Delhi, [“Ld. CIT(A)”, for short], dated 27.01.2017 for Assessment Year 2011-12. Grounds taken in this appeal of Revenue are as under:

“1. Whether in facts and on circumstances of the case, the Ld. CIT(A) is legally justified in deleting disallowance of excess provision of warranty expenses of Rs. 95,05,033/- by ignoring a fact that excessive provision for the warranty expense was not made on the basis of scientific method and ITA No.- 2126/Del/2017 M/s. Minda Valeo Security Systems Pvt. Ltd. no historical trend was kept in mind as stipulated in decision of Hon’ble supreme Court in case of Rotork Controls India Pvt. Limited vs. {2009} 314 ITR 62 which resulted in utilization of only 36% of the provision made ? 2. Whether in facts and on circumstances of the case, the Ld. CIT(A) is legally justified in deleting disallowance of excess provisions of warranty expense of Rs. 95,05,033/- without recording any reason for holding that ratio decidendi of the decision of Hon’ble Apex Court in case in his short and one line order at paragraph 9.4 of the impugned order ? 3. That the appellant craves leave to add, amend, alter or forgo any ground(s) of appeal either before or at the time of hearing of the appeal.”

(B) At the outset, it was brought to our notice at the time of hearing, by learned Counsel for assessee, that tax effect in this appeal is below Rs. 50,00,000/-. Vide recent CBDT Circular No. 17/2019 dated 08.08.2019 read with earlier CBDT Circular No. 3 of 2018, dated 11.07.2018, minimum threshold limit of tax effect for filing of appeals by Revenue in Income Tax Appellate Tribunal (“ITAT”, for short) has been enhanced to Rs. 50,00,000/-. In a subsequent clarification issued by CBDT vide F.No. 279/Misc/M- 93/2018-ITJ, dated 20/08/2019, it has been clarified by CBDT that the aforesaid revised monetary limit is also applicable to all pending appeals in ITAT. In view of the foregoing, it was contended by learned counsel for assessee, that this appeal is not maintainable. Learned Senior Departmental Representative agreed with this contention of the Ld. Counsel for assessee, and did not press the appeal. Therefore, this appeal is dismissed being not pressed, and also being not maintainable having regard to aforesaid CBDT Circular No. 17/2019 dated 08.08.2019 read with aforesaid CBDT Circular No. 3 of 2018 in the light of aforesaid clarification dated 20/08/2019.

ITA No.- 2126/Del/2017 M/s. Minda Valeo Security Systems Pvt. Ltd. (C) Before leaving, we clarify that Revenue will be at liberty to approach Income Tax Appellate Tribunal U/s 254(2) of Income Tax Act, 1961 seeking recall of this order and, for restoration of this appeal if it is found that appeal of Revenue is not covered by aforesaid CBDT Circulars dated 08.08.2019 and 11.07.2018.

(D) In the result, this appeal by Revenue is dismissed. Our decision was orally pronounced in the Open Court after conclusion of hearing on the date of hearing. Now, this written order is pronounced in Open Court on 28/02/2020.