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Facts
The Revenue filed an appeal against the CIT(A)'s order deleting a disallowance made by the AO under section 40a(ia) for AY 2017-18. The tax effect involved in the Revenue's appeal was Rs. 52,21,794/-, which was less than the monetary limit for appeals prescribed by CBDT circulars.
Held
The Tribunal dismissed the Revenue's appeal, holding that the tax effect was below the monetary limit stipulated by CBDT Circulars 09/2024 and 05/2024. The Tribunal clarified that the exception clause (Para 3.1.i) relied upon by the Revenue for appeal maintainability was applicable only to orders under sections 201(1)/201(1A) and not to disallowances under section 40a(ia). The Assessee's cross-objection was also dismissed as infructuous.
Key Issues
Maintainability of the Revenue's appeal due to low tax effect as per CBDT circulars, and the applicability of the exception clause for TDS/TCS liability disputes to disallowances under section 40a(ia).
Sections Cited
40a(ia), 143(3), 144B, 201(1), 201(1A)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘C’: NEW DELHI
Before: SHRI S. RIFAUR RAHMAN & SHRI YOGESH KUMAR U.S.
Assessment Year 2017-18, wherein the Ld. CIT(A) deleted the disallowance made by the A.O. u/s 40a(ia) of the Income Tax Act, 1961 (‘Act’ for short).
The Ld. Counsel for the Assessee submitted that the tax effect involved in the present Appeal of the Revenue is Rs.60 lacs, therefore, the present appeal isliable to be dismissed in the light of the Circular No.09 of 2024 dated 17/09/2024 read with Circular No. 05/2024 dated 15th March 2024 issued by the CBDT.
Per contra, the Departmental Representative submitted that the issue involved in the present Appeal comes under the exception mentioned in Para 3.1.i of the Circular No.05/2024, therefore, submitted that the present Appeal of the Revenue is maintainable.
We have heard both the parties and perused the material available on record. In the present case, the assessment order came to be passed u/s 143(3) r.w.s. 144B of the Act wherein the Ld. A.O. disallowed Rs. 1,60,94,294/-u/s 40a(ia) of the Act, which has been deleted by Ld. CIT(A) by relying on the in Assessee’s own case in ITA 2014-15 to 2016-17. The said order of the Tribunal is under challenge before us. Admittedly, the tax effect in the present appeal filed by the Revenue is Rs. 52,21,794/- which is lesser than the monetary limit prescribed in the Circular No.09 of 2024 dated 17/09/2024 issued in continuation with Circular No. 5/2024 dated 15/03/2024.
It is the submission of the Department's Representative that the Appeal is maintainable as the issue involved in the present Appeal lies under the exception mentioned in para 3.1.i of the Circular No.05/2024. For the sake of adjudicating the said contention the said exception is reproduced as under: -
“i. Where dispute relates to the determination of the nature of transaction such that the liability to deduct TDS/TCS thereon or otherwise is under question, or
In our opinion, the above said exception 3.1.i. of the Circular No. 5/2024 is applicable to the cases which are arising out of order passed u/s 201(1)/201(1A) of the Act however, the said exception is not applicable to the cases which are arising out of the disallowance made by the A.O. u/s 40a(ia) of the Act. Accordingly, we dismiss Effect involved in the said Appeal is lesser than the monetary limit prescribed in the Circular No. 05/2024, however, we reserve liberty to the Revenue to file appropriate application if the issue involved in the Appeal lies under any of the exceptions mentioned in the Circular No. 05/2024 issued by the CBDT.
Since we have dismissed the Appeal filed by the Revenue the Cross Objection No. 145/Del/2023 is also dismissed as having become in-fructuous.