DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOLLAM vs. POOJA RAJ PILLAI, PATHANAMTHITTA

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ITA 334/COCH/2024Status: DisposedITAT Cochin09 June 2025AY 2014-15Bench: SHRI INTURI RAMA RAO (Accountant Member), SHRI SOUNDARARAJAN K. (Judicial Member)4 pages

AI SummaryDismissed

Facts

The assessee and Revenue filed appeals and cross-objections, respectively, against orders of the CIT(A) for various assessment years. The assessee's counsel contended that the Revenue's appeals should be dismissed due to a tax effect of less than Rs. 60 lakhs, as per CBDT Circular No. 9 of 2024. The CIT DR, however, argued that the cases fell under exceptions for organised tax evasion or cascading effect, particularly concerning additions made under Sections 68/69 of the Act, as per CBDT Circular No. 5 of 2024.

Held

The Tribunal determined that the Revenue's appeals did not fall under the specified exceptions for organised tax evasion or similar issues outlined in CBDT Circular No. 5 of 2024. Consequently, applying CBDT Circular No. 9 of 2024, and noting the tax effect was below Rs. 60 lakhs, the Revenue's appeals were dismissed as not maintainable. The issues raised were left open for future proceedings, and the Revenue retained the liberty to seek recall if exceptions applied, leading to the dismissal of the assessee's cross-objections as infructuous.

Key Issues

Whether appeals with tax effect below the monetary limit prescribed by CBDT Circular No. 9/2024 should be dismissed, and if such appeals fall under the exceptions for organized tax evasion or additions under Sections 68/69 as per CBDT Circular No. 5/2024.

Sections Cited

68, 69

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, COCHIN BENCH

Before: SHRI INTURI RAMA RAO, AM & SHRI SOUNDARARAJAN K., JM

For Appellant: Shri S.K. Tulsiyan, Advocate

For Respondent: Shri Suresh Sivanandan, CIT-DR

Hearing: 21.03.2025Pronounced: 09.06.2025

O R D E R Per Bench These are appeals filed by the assessee and Revenue and Cross Objection filed by the assessee directed against the orders of the Commissioner of Income Tax (Appeals)-3, Kochi [CIT(A)], dated 29.12.2023 for different Assessment Years. to 334/Coch/2024 CO Nos. 17 to 21/Coch/2024 Pooja Raj Pillai 2. At the outset the learned counsel for the assessee submits that the tax effect involved in these appeals filed by the Revenue is less than Rs. 60,00,000/-. Therefore, in view of the CBDT Circular No. 9 of 2024 dated 17.09.2024 the appeal should be dismissed on law tax effect.

On the other hand, the learned CIT DR submits that the present appeals are covered by the exception enumerated in clause (h) of para 3.1 of CBDT Circular No. 5 of 2024 dated 15.03.2024 and, therefore, low tax effect cannot be applied on the appellant’s case. It is further submitted that in view of the judgement of the Hon'ble Supreme Court in the case of CIT v. Surya Herbal Ltd. the CBDT circular should not be applied ispo facto when the matter has a cascading effect.

We have heard the rival contentions and perused the material available on record. The issue that comes up for our consideration is whether the CBDT circular No. 5 of 2024 can be applied ispo facto or not. The exceptions enumerated in clause (h) in para 3.1 of the circular reads as under: -

“(h) Cases involving organised tax evasion including cases of bogus capital gains/losses through penny stock, cases of accommodation entries.” The present matter does not involve the issue bogus capital gains/losses through penny stock and case of accommodation entries nor it can be said to be organised tax evasion. Therefore, the to 334/Coch/2024 CO Nos. 17 to 21/Coch/2024 Pooja Raj Pillai objections of the learned Sr. DR is ruled out. As regards the other contention of the learned Sr. DR that in view of the decision of the Hon'ble Supreme Court in the case of Surya Herbal Ltd. (supra) the circular should not be applied ispo facto also cannot be accepted in view of the fact that the no common principle of law is involved in these matters as the issue involved in the present appeal is the addition made u/s. 68/69 of the Act, which is undoubtedly a mixed question of facts and law. Therefore, we are of the considered opinion that CBDT Circular No. 5 of 2024 cannot be applied in the present matter. Accordingly the matter is disposed as under.