ACIT, CORP CIR-6(1), CHENNAI vs. SAMKAR SEALING SYSTEMS PVT LTD, CHENNAI

This appeal of the Revenue is directed against the order of the Commissioner of Income Tax (Appeals) -16, Chennai, dated 14.11.2018 and pertains to assessment year 2012-13. The assessee has filed the cross-objection against the very same order of the CIT(Appeals). Therefore, we heard the appeal of the Revenue and the cross-objection of the assessee together and disposing the same by this common order.

On hearing the Ld. Departmental Representative, we find that the tax effect in this case is less than `50 lakhs. The CBDT in its Circular No.17/2019 dated 08.08.2019 increased the monetary limit for filing appeal before this Tribunal and instructed its officers to withdraw all the appeals pending before the ITAT where the tax effect is less than `50 lakhs. This Tribunal is of the considered opinion that this Circular of CBDT is binding on the officers of the Department. Therefore, the Revenue cannot proceed further in this appeal. Accordingly, this appeal of the Revenue stands dismissed.

Now coming to the cross-objection filed by the assessee, Shri G. Baskar, the Ld.counsel for the assessee, submitted that there was no dividend income, therefore, there cannot be any disallowance either under normal computation or under MAT computation. On a query from the Bench, whether there was any finding either by the Assessing Officer or by the CIT(Appeals) that there was no dividend income, the Ld.counsel submitted that there was no such finding by the lower authorities, however, the matter may be remitted back to the file of the Assessing Officer for reconsideration.

We heard Shri AR.V. Sreenivasan, the Ld. D.R. also. The assessee claims before this Tribunal that there was no dividend income. However, there was no finding either by the Assessing Officer or by the CIT(Appeals) with regard to availability of the dividend income. Therefore, this Tribunal is of the considered opinion that the matter needs to be re-examined by the Assessing Officer. Accordingly, the orders of the authorities below are set aside and the issue of disallowance made under Section 14A of the Income-tax Act, 1961 (in short 'the Act') is remitted back to the file of the Assessing Officer. The Assessing Officer shall re-examine the matter and bring on record the availability of the dividend income and thereafter decide the issue afresh in accordance with law, after giving a reasonable opportunity to the assessee.

In the result, the appeal filed by the Revenue is dismissed.