DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOLLAM vs. SREEVALSAM JEWELLERS, PATHANAMTHITTA

Facts

These are appeals filed by both the assessee and Revenue against orders of the CIT(A) for various assessment years. The Revenue's appeals involved a tax effect of less than Rs. 60 lakhs, leading the assessee to request dismissal based on CBDT Circular No. 9 of 2024. The Revenue countered that its appeals fell under exceptions related to organized tax evasion or that the circular should not apply due to a cascading effect as per CIT v. Surya Herbal Ltd.

Held

The Tribunal determined that the Revenue's appeals did not involve organized tax evasion, bogus capital gains/losses, or accommodation entries, thereby not meeting the exceptions to the CBDT circular. It clarified that the issue, an addition made under Section 68/69 of the Act, was a mixed question of facts and law, distinguishing it from the precedent cited. Consequently, all appeals filed by the Revenue were dismissed as not maintainable due to the tax effect being below Rs. 60 lakhs, in line with CBDT Circular No. 9 of 2024, while leaving the issues open for appropriate future proceedings if exceptions arise.

Key Issues

Whether appeals filed by the Revenue with a tax effect below Rs. 60 lakhs are maintainable under CBDT Circular No. 9 of 2024, and if any exceptions to the circular's application are applicable.