DEPUTY COMMISSIONER OF INCOME TAX, NEW DELHI vs. INDOFIL INDUSTRIES LTD., ANDHERI EAST, MUMBAI
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.
PER YOGESH KUMAR U.S.,JM:
This present appeal as well as the Cross Objection are
preferred by the Department and the Assessee respectively by
2 ITA No. 3005 and C.O No.145/Del/2023 DCIT Vs. Indofil Industries Ltd. challenging the order of the Ld. CIT(A) dated 08/08/2023 for the
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
3 ITA No. 3005 and C.O No.145/Del/2023 DCIT Vs. Indofil Industries Ltd. No. 2292/Mum/2022 dated 30/01/2023 for Assessment Year
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
4 ITA No. 3005 and C.O No.145/Del/2023 DCIT Vs. Indofil Industries Ltd.
the Appeal of the Revenue in ITA No. 3005/Del/2023 as the Tax
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.
Order pronounced in open Court on 30th October, 2024
Sd/- Sd/- (S. RIFAUR RAHMAN) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 30/10/2024 R.N, Sr. PS
