ACIT, NEW DELHI vs. M/S. JAI BEVERAGES, NEW DELHI

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ITA 401/DEL/2016Status: DisposedITAT Delhi21 November 2019AY 2012-135 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 dismissed the Revenue's appeal and the assessee's cross-objection. This was primarily due to the tax effect being below the monetary limit prescribed by CBDT circulars for filing appeals.

What were the facts?

The Revenue appealed against the deletion of penalty by the CIT(A), while the assessee filed a cross-objection. The appeal and cross-objection were heard by the ITAT.

What were the issues?

The primary issue was the maintainability of the appeal due to low tax effect, and secondarily, the validity of penalty proceedings under Section 271AAA.

Which sections of the Income-tax Act were involved?

Section 271AAA,Section 274(1)

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, DELHI BENCH “A” New Delhi

Before: SHRI H.S. SIDHU & SHRI R.K. PANDA

Heard together (2 matters)

I.T.A.No.401/Del/2016
I.T.A No.5068/Del/2016

Read from the judgment's own cause title. This page is filed under one of them.

आदेश /O R D E R

PER H.S. SIDHU, J.M. 1. This appeal filed by the Revenue and Cross Objection filed by the assessee against the impugned order dated 30.11.2015 passed by the Ld.

ACIT vs. Jai Beverages/ I.T.A.No.401/Del/2016/A.Y.2012-13 And Jai Beverages vs. ACIT/Cross Objection No. 90/Del/2016 Page 2 of 5 CIT(Appeals)-24, New Delhi in relation to assessment year 2012-13 on the following grounds:

1. “The order of Ld. CIT(A) is not correct in law and facts.

2. On the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the penalty u/s 271AAA of the Act, amounting to Rs. 38,49,680/-. 3. On the facts and circumstances of the case, the CIT(A) has erred in holding that the inclusion of additional income without any documentary evidence after the search, in P&L Account by the assessee does not represent undisclosed income of the assessee. 4. On the facts and circumstances of the case, the CIT(A) has erred in holding that the “inclusion of income in P&L Account” does not constitute an entry in “books of account”. 5. On the facts and circumstances of the case, the CIT(A) has erred in relying on the order of ITAT, Delhi in case of Neeraj Signal vs. ACIT Central Circle (2013) 37 taxman.com 189 when the facts of this case are different. 6. On the facts and circumstances of the case, the CIT(A) has erred in holding that payment of tax and interest on undisclosed income was done by the assessee, in absence of any specific proof in this regard. 7. The appellant craves leave to add, amend any/all grounds of appeal before or during the course of hearing of the appeal.”

Grounds of Cross Objection No. 90/Del/2016 : -

1.

“That on the facts and circumstances of the case, the Ld. CIT(Appeals) erred both in facts and in law in upholding the ACIT vs. Jai Beverages/ I.T.A.No.401/Del/2016/A.Y.2012-13 And Jai Beverages vs. ACIT/Cross Objection No. 90/Del/2016 Page 3 of 5 validity of penalty proceedings u/s 271AAA of the Income Tax Act, 1961, though no reasonable opportunity of being heard was afforded to the assessee before imposing penalty as contemplated in section 271AAA(4) read with section 274(1) of the Income Tax Act, 1961.

2. That on the facts and circumstances of the case, the Ld. CIT(Appeals) erred both in facts and in law in upholding the contention of the AO that imposition of penalty u/s 271AAA of the Income Tax Act, 1961 is mandatory and not discretionary in nature.”

2.

We have heard the learned CIT (D.R.), who has pointed out the tax effect involved in this appeal, is below monetary limit prescribed by the CBDT. We find that the CBDT vide Circular No.17/2019 dated 8th August 2019 [F.No.279/ Misc.142/ 2007-ITJ (Pt)] by amending para 3 of CBDT Circular No.3/2018 dated 11.07.2018 has enhanced the monetary limit for filing of appeal before Tribunal to Rs.50 lakhs and has also removed the anomaly in para 5 of said Circular No. 3/2018. We find that the present case does not fall within the exceptions clause 10 of said CBDT Circular No. 3/2018. Therefore, the present appeal is not maintainable as

per above Circular No. 17/2019, hence dismissed. This Circular is applicable to all pending appeals as clarified by CBDT letter dated 20.08.2019 [F. No. 279/Misc./M-93/2018-ITJ] and in the light of judgement of Hon`ble Supreme Court in the case of Pr. CIT, Jaipur v.

Meenakshi Modi SLP (Civil) Diary No. 25076 of 2019-dated 16.08.2019

ACIT vs. Jai Beverages/ I.T.A.No.401/Del/2016/A.Y.2012-13 And Jai Beverages vs. ACIT/Cross Objection No. 90/Del/2016 Page 4 of 5 wherein the Hon`ble Supreme Court has dismissed the appeal of Revenue, as tax involved was less than Rs. 2 Crores. However, the Revenue is at liberty to approach to this Tribunal for recalling this order, if it is comes to the notice of the AO that the tax effect is more than the monetary limit provided under above Circular or the appeals is fall within ambit of the exceptions provided under the said Circular.

3.

At the time of hearing, Ld. Counsel for the assessee stated that the tax effect in the Departmental appeal is less than 50 lakhs. Keeping in view the latest Instructions, it may be dismissed.

4.

As regards Assessee’s Cross Objection is concerned, since we have already dismissed the Revenue’s Appeal on account of low tax effect, as aforesaid, hence, the Cross Objection filed by the assessee has become infructuous and dismissed as such.

5.

In the result, the appeal filed by the Department as well as Cross Objection of the assessee stand dismissed.

The order pronounced in the open court on 21.11.2019

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