INCOME TAX OFFICER, TDS WARD, SALEM, SALEM vs. COMMISSIONER ATTUR MUNICIPALITY, SALEM
Facts
The revenue filed appeals against orders of the CIT(A) concerning Assessment Years 2023-24 and 2024-25. The appeals stemmed from an Assessing Officer's order holding the assessee in default for not deducting TDS on interest paid to M/s TUFIDCO.
Held
The Tribunal noted that the revenue's appeals were not maintainable due to low tax effect, citing a CBDT circular setting a monetary limit of Rs. 60 lakhs for filing appeals. Since the tax effect in both AYs was below this limit, the appeals were dismissed.
Key Issues
Whether the revenue's appeals are maintainable given the low tax effect, as per CBDT Circular No.09/2024.
Sections Cited
194A, 201(1), 201(1A), 250
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Income Tax Appellate Tribunal, ‘A’ BENCH: CHENNAI
Before: SHRI ABY T. VARKEY & MS. PADMAVATHY.S
आदेश / O R D E R
PER PADMAVATHY.S, A.M: These appeals by the revenue are against separate orders of the Commissioner of Income Tax (Appeals), ADDL/JCIT(A)-2, Kolkata, (in short "FAA") passed u/s. 250 of the Income Tax Act, 1961 (in short "the Act") all dated 04.11.2025 for Assessment Year (AY) 2023-24 and dated 31.10.2025 for AY 2024-25. The impugned order is emanating from the order passed u/s.201(1)/(1A) passed by the Assessing Officer (AO) for both these AYs.
ITA Nos.3736 & 3737/Chny/2025 The Commissioner of Municipality :- 2 -:
The appellant deductor is a local body. An information was available to the department that TDS on various expenses was not deducted and remitted the Central Government Account by the assessee. Accordingly, notice u/s 133(6) of the Act was issued to the assessee and based on the response filed by the assessee, it is noticed that interest was paid to M/s TUFIDCO without deduction of TDS as per the provisions of section 194A of the Act. The AO held that the assessee has defaulted in complying with provisions of section 194A of the Act and accordingly treated the assessee as assessee in default u/s 201(1) of the Act and charged interest u/s 201(1A) of the Act. Aggrieved, the assessee preferred appeal before the CIT(A). The CIT(A) deleted the addition made by the AO holding that since M/s TUFIDCO is a nodal agency, fully owned and controlled by the State Government the payments made by the assessee are to be considered as payments made to Government on which there is no requirement to deduct tax at source as per the provisions of section 194A(3)(iii)(f) of the Act. The revenue is in appeal before the Tribunal against the order of the CIT(A).
We heard the parties and perused the material on record. The Ld. AR, at the outset, submitted that the appeal filed by the revenue is not maintainable due to low tax effect. The Ld. DR did not controvert the said submission. We notice that the Central Board of direct taxes (CBDT) vide Circular No.09/2024 dated 17th September, 2024 has set the monetary limit of tax effect for filing the appeal by the revenue at Rs.60 lakhs. In the given case, it is an undisputed fact that the tax effect is below the said limit for both the AYs i.e. AY 2023-24 and AY 2024-25 and therefore, we are of the considered view that the appeal filed by the revenue is not maintainable on the ground of the tax effect are being below the monetary limit as fixed by the
ITA Nos.3736 & 3737/Chny/2025 The Commissioner of Municipality :- 3 -:
CBDT vide the above circular. Accordingly, we dismiss the appeals filed by the revenue on the ground of monetary limits.
In result, both the appeals of the revenue for AY 2023-24 to AY 2024- 25 are dismissed
Order pronounced on 27th day of February, 2026 at Chennai.
Sd/- Sd/- (एबी टी. वक�) (पदमावती यस) (ABY. T. Varkey) (Padmavathy.S) लेखा लेखा सद�य लेखा लेखा सद�य सद�य /Accountant Member सद�य �याियक सद�य �याियक सद�य / Judicial Member �याियक �याियक सद�य सद�य चे�नई/Chennai, �दनांक/Dated: 27th February, 2026. EDN, Sr. P.S आदेश क� �ितिल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकर आयु�/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय �ितिनिध/DR 5. गाड� फाईल/GF
