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Facts
The Revenue filed an appeal against the CIT(A)'s order deleting an addition of Rs. 12,78,000/- related to unexplained investment under Section 69 of the Income Tax Act, 1961, for Assessment Year 2017-18. The tax effect of this addition was less than Rs. 60,00,000/-.
Held
The Tribunal observed that the appeal's tax effect was below the monetary limit of Rs. 60,00,000/- prescribed by CBDT Circular No. 09/2024 dated 17.09.2024 for filing appeals before the Appellate Tribunal. As CBDT circulars are binding on the Revenue, the appeal was dismissed in limine for being contrary to the Department's policy decision.
Key Issues
Whether the Revenue's appeal before the ITAT is maintainable when the tax effect is below the monetary limit prescribed by CBDT Circular No. 09/2024.
Sections Cited
69, 147, 144
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Income Tax Appellate Tribunal, RAJKOTBENCH (SMC
Before: DR. ARJUN LAL SAINI
आदेश / O R D E R
PER DR. A. L. SAINI, AM:
Captioned appeal filed by the assessee, pertaining to Assessment Year (AY)2017-18,is directed against the order passed by the Learned Commissioner of Income Tax(Appeals), National Faceless Appeal Centre, Delhi [in short “the Ld. CIT(A)/NFAC”], dated 07/11/2024,which in turn arises out of an assessment order passed by Assessing Officer (in short ‘the AO”), u/s 147 r.w.s. 144of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), dated 20/04/2023.
In this revenue’s appeal in I noticed that Revenue has raised ground in respect of addition of Rs.12,78,000/- deleted by the ld. CIT(A), which relates to unexplained investment under section 69 of the Act, (AY 2017-18) ITO v. Narbherambhai Mahadevbhai Kavar whichcomes in the ambit of tax effect of CBDT Circular, vide Circular No. 09/2024 dated 17.09.2024.
Recently the CBDT has issued Circular No. 09/2024 dated 17.09.2024, whereby the monetary limits for filing of appeals by the Department before Income Tax Appellate Tribunal and High Courts and SLP before Supreme Court have been increased as measure for reducing Litigation. The revised monetary limits laid down in para-2 of this Circular are as follows:
Before Appellate Tribunal Rs. 60,00,000/- 2. Before High Court Rs. 2,00,00,000/- 3. Before Supreme Court Rs. 5,00,00,000/-
In the present case, the tax effect by the revenue is less than Rs.60,00,000/-. Though this appeal had been filed by the revenue on 13/01/2025 and was within the monetary limit in the form of tax effect for filing appeals before Tribunal, in view of the recent Circular of CBDT, even such appeals will be governed by the new monetary limits laid down in the CBDT Circular No.09/2024 referred to above.
It is a settled law that the Circulars issued by CBDT are binding on the Revenue. This position was confirmed by the Apex Court in the case of Commissioner of Customs vs. Indian Oil Corporation Ltd. reported in 267 ITR 272 wherein their Lordships examined the earlier decisions of the Apex Court with regard to binding nature of the Circular and laid down that when a circular issued by the Board remains in operation then the Revenue is bound by it and cannot be allowed to plead that it is not valid or that it is contrary to the terms of the statute. The appeal under consideration has certainly been filed contrary to the Circular issued by the CBDT Circular No. 09/2024 dated 17.09.2024.
(AY 2017-18) ITO v. Narbherambhai Mahadevbhai Kavar
In the event, the Revenue finds at a later point of time that the tax effect in the appeal is more than Rs.60 lakhs or despite low tax effect the appeal of the revenue is maintainable, the revenue is at liberty to move this Tribunal for recalling of this order.
In view of the above, I, hold that the appeal filed by the Department, against the impugned order of the Ld. CIT(A), is contrary to the policy decision of the Department and as such the appeal filed by the Department ( Revenue) in is dismissed in limine.
In the result, the appeal of the Revenue in , is dismissed.
Order pronounced in the open court on 25/04/2025.