INCOME TAX OFFICER 25(1)(2), MUMBAI vs. SMITA ROHIT LUNKAR, MUMBAI

Shri Ruturaj H. Gurjar, appearing on behalf of the assessee submitted at the outset that appeal of the Revenue is liable to be dismissed on account of low tax effect in the light of recent CBDT Circular No.17/2019 dated 08/08/2019.

Shri R. Bhoopati, representing the Department vehemently opposed the contention of the ld. Authorized Representative of the assessee. The ld.Departmental Representative submitted that this appeal is covered by exceptions provided in Para-10 of the CBDT Circular No.3/2018 dated 11/07/2018. The ld.Departmental Representative further pointed that reassessment proceedings were initiated in the case of assessee after receiving information from Directorate of Income Tax (Investigation) regarding assessee’s involvement in bogus purchases from hawala operators.

Controverting the submissions of ld.Departmental Representative, the ld. Authorized Representative of assessee submitted that Directorate of Income Tax (Investigation) is an internal agency/wing of the Income tax Department and hence, is not covered by exceptions contained in Para-10 of the CBDT Circular No.3/2018 dated 11/07/2018. In support of his submissions the ld. Authorized Representative of the assessee placed reliance on the decision rendered in the case of ITO vs. Amarchand P. Shaw reported as 73 ITR(Tribunal) 588(Mum-Trib).

We have heard the submissions made by rival sides and have perused the orders of authorities below. We have also considered the decision and CBDT Circular on which reliance has been placed by ld. Authorized Representative of the assessee.

After examining the records we observe that the tax effect involved in the appeal by Revenue is less than Rs.50.00 lacs. Hence, the appeal of the Revenue is liable to be dismissed on account of low tax effect in line with recent CBDT circular No. 17/2019 dated 08/08/2019.

In so far as the objection of the Revenue that the reopening was made on the basis of information received from the Directorate of Income Tax (Investigation) and hence, the present appeal by the Revenue falls in the exceptions provided in Para-10 of CBDT Circular No.3/2018 dated 11/07/2018, we observe that the Co-ordinate Bench in the case of ITO vs. Amarchand P. Shah(supra) has held that Directorate of Income Tax (Investigation) is not an external source/agency. It is a part of Income Tax Department. Therefore, the exceptions provided in Para-10 of the CBDT Circular(supra) would not get attracted. The ld.Departmental Representative has not been able to controvert the findings of the Tribunal on this issue.

Thus, in light of the facts and the decision of Tribunal in the case of ITO vs. Amarchand P. Shah(supra), the present appeal of the Revenue is liable to be dismissed on account of low tax effect. We hold and direct accordingly.

In the result, appeal of the Revenue is dismissed.