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Facts
The assessee company filed its return declaring a business loss. The Assessing Officer (AO) reopened the assessment under Section 147 alleging violation of Section 269T for loan repayment. However, the AO made no additions, and the CIT(A) held no violation of Section 269T and that reopening was unjustified.
Held
The Tribunal dismissed the revenue's appeal solely on the ground of low tax effect, as it was nil and below the monetary limit set by CBDT Circular No. 09/2024. The Tribunal noted that no tax demand arose from the assessment order.
Key Issues
Whether the revenue's appeal is maintainable due to low tax effect, and if the CIT(A)'s findings on Section 269T violation and validity of reopening were to be considered.
Sections Cited
147, 143(3), 269T, 250
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Income Tax Appellate Tribunal, C BENCH: CHENNAI
Before: SHRI ABY T. VARKEY & MS. PADMAVATHY.S
आदेश / O R D E R PER PADMAVATHY.S, A.M: This appeal by the revenue is against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi, (in short "CIT(A)") passed u/s. 250 of the Income Tax Act, 1961 (in short "the Act") dated 25.08.2025 for Assessment Year (AY) 2018-19.
The assessee is a company and filed the return of income for AY 2018- 19 on 5.10.2018 declaring a business loss of ₹ 92, 70, 56, 472/-. The case is selected for scrutiny and the statutory notices were duly served on the assessee. The assessment was completed under section 143(3) accepting the :- 2 -:
1. income returned by the assessee. Subsequently the assessing officer noticed that the assessee has repaid loan to the tune of Rs.8,35,00,000/- in contravention of the provisions of section 269T of the act. The assessing officer therefore issued the notice under section148A(b) calling on the assessee to furnish the relevant details. The assessing officer passed order under section 147 without making any additions. However the assessing officer has stated in the assessment order that the assessee has infringed the provisions of section 269T related to the repayment of loan. The assessee filed further appeal before the CIT(A). The CIT(A) held that that the legislative intent behind 269T is to curb black money and in assessee's case since the loan is settled by the assessee through book entries there is no violation under section 269T. The CIT(A) also held that the proceedings initiated under section 147 on the ground that infringement of the provisions of section 269T cannot be a ground for reopening since there is no escapement of income. The revenue is an appeal before the tribunal against the order of the CIT(A).
We heard the parties and perused the material on record. We notice that in the assessment completed under section 147 the assessing officer did not make any addition. Therefore there is no tax demand that is arising out of the impugned assessment order. The Central Board of direct taxes (CBDT) wide circular number 09/2024 dated 17 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 nil and therefore we are of the considered view that the appeal filed by the revenue need to be dismissed on the ground of the tax effect are being below the monetary limit as fixed by :- 3 -:
the CBDT wide the above circular. Accordingly we dismiss the appeal filed by the revenue on the ground of monetary limits.
In result the appeal of the revenue is dismissed
Order pronounced on 17th day of February, 2026 at Chennai.