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Facts
The Revenue appealed against the CIT(A)'s order for AY 2016-17, challenging the classification of Rs. 1,55,13,939/- received as development fee. The Revenue contended these were not voluntary contributions forming part of the corpus under section 11(1)(d) and should be treated as revenue receipts, as held by the AO.
Held
The Tribunal dismissed the Revenue's appeal in limine, finding it not maintainable. This decision was based on CBDT Circular No.09 of 2024, which revised monetary thresholds for appeals, as the tax effect in the instant case did not exceed the prescribed limit of Rs.60 Lakhs. The Tribunal noted that the Revenue could seek restoration if the Circular was inapplicable.
Key Issues
The primary issue was the classification of development fees as voluntary contributions under section 11(1)(d) of the Income Tax Act, 1961, or as revenue receipts. However, the Tribunal's decision hinged on the maintainability of the appeal under CBDT Circular No.09 of 2024, which sets monetary limits for litigation.
Sections Cited
143(3), 11(1)(d)
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Income Tax Appellate Tribunal, IN THE INCOME TAX APPELLATE TRIBUNAL
Before: SHRI PRADIP KUMAR KEDIA & SHRI PRADIP KUMAR KEDIA & SHRI PRADIP KUMAR KEDIA & SHRI VIMAL KUMARSHRI VIMAL KUMAR
ORDER
PER PRADIP KUMAR KEDIA PRADIP KUMAR KEDIA, AM :
The captioned appeal has been filed at the instance of the The captioned appeal has been filed at the instance of the The captioned appeal has been filed at the instance of the Revenue against the order of the Revenue against the order of the Ld. CIT(A)-40, Delhi [“Ld. Ld. CIT(A)”], dated 14.06.2019 arising in the assessment dated 14.06.2019 arising in the assessment order dated 28.12.201 order dated 28.12.2018 passed by the Assessing Officer (AO) under s passed by the Assessing Officer (AO) under section 14 143(3) of the Income Tax Act, 1961 ( Income Tax Act, 1961 (“the Act”) concerning assessment year 201 ) concerning assessment year 2016- 17.
The grounds of appeal raised by the Revenue read as under: The grounds of appeal raised by the Revenue read as under:- The grounds of appeal raised by the Revenue read as under: 1. “On the facts and in the ci “On the facts and in the circumstances of the case and in law, Ld. rcumstances of the case and in law, Ld. CIT(A) has erred in law in ignoring the receipts on account of CIT(A) has erred in law in ignoring the receipts on account of CIT(A) has erred in law in ignoring the receipts on account of development development fee fee of of Rs. Rs. 1,55,13,939/ 1,55,13,939/- were were not not voluntary voluntary contributions made with specific direction that they shall form part contributions made with specific direction that they shall form part contributions made with specific direction that they shall form part of corpus within the meaning of corpus within the meaning of provisions of section 11(1)(d) of the of provisions of section 11(1)(d) of the Act, AO has rightly held that the same was in the nature of revenue Act, AO has rightly held that the same was in the nature of revenue Act, AO has rightly held that the same was in the nature of revenue Receipts.
2. The appellant craves leave to add, to alter or amend any ground of The appellant craves leave to add, to alter or amend any ground of The appellant craves leave to add, to alter or amend any ground of appeal raised at the time of hearing.” appeal raised at the time of hearing.”
3. At the time of hearing, it was submitted by the Ld.AR for the At the time of hearing, it was submitted by the Ld.AR for the At the time of hearing, it was submitted by the Ld.AR for the assessee that the appeal filed by the Revenue is hit by recently assessee that the appeal filed by the Revenue is hit by recently assessee that the appeal filed by the Revenue is hit by recently issued CBDT Circular No. CBDT Circular No.09 of 2024 dated 17.09.20 2024 revising the previous thresholds pertaining to tax effects. As per aforesaid the previous thresholds pertaining to tax effects. As per aforesaid the previous thresholds pertaining to tax effects. As per aforesaid Circular, all pending appeals filed by Revenue are liable to be Circular, all pending appeals filed by Revenue are liable to be Circular, all pending appeals filed by Revenue are liable to be dismissed as a measure for reducing litigation where the tax effect dismissed as a measure for reducing litigation where the tax effect dismissed as a measure for reducing litigation where the tax effect does not exceed the prescribed monetary li does not exceed the prescribed monetary limit which is now revised mit which is now revised at Rs.60 Lakhs. In the instant case, the tax effect on 0 Lakhs. In the instant case, the tax effect on the disputed the disputed issues raised by the Revenue is stated to be not exceeding Rs. issues raised by the Revenue is stated to be not exceeding Rs.60 issues raised by the Revenue is stated to be not exceeding Rs. lakhs and therefore, appeal of the Revenue is required to be appeal of the Revenue is required to be dismissed in limine.
4. The Ld.Sr.DR for the Revenue fairly admitted the applicability DR for the Revenue fairly admitted the applicability DR for the Revenue fairly admitted the applicability of the CBDT Circular No. of the CBDT Circular No.09 of 2024 dated 17.09.2024. Accordingly, . Accordingly, appeal of the Revenue is dismissed as not maintainable. However, appeal of the Revenue is dismissed as not maintainable. However, appeal of the Revenue is dismissed as not maintainable. However, it will be open to the Revenue to seek restoration of its appeal on it will be open to the Revenue to seek restoration of its appeal on it will be open to the Revenue to seek restoration of its appeal on showing inapplicability of the aforesaid CBDT Circular in any showing inapplicability of the aforesaid CBDT Circular in any showing inapplicability of the aforesaid CBDT Circular in any manner.