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Income Tax Appellate Tribunal, “SMC - C” BENCH : BANGALORE
Before: SHRI SUNIL KUMAR YADAV
Date of hearing : 27.11.2017 Date of Pronouncement : 15.12.2017 O R D E R This appeal is by the revenue against the order of CIT(Appeals) inter alia on the following grounds:- “
1. The order of the CIT (Appeals) is opposed to law and the facts and circumstances of the case.
2. Whether Ld. CIT(A) is justified in deleting the addition of Rs.25,10,263 when the AO had made the addition based on the reply of M/s S.M. Enterprises.
3. On the facts and circumstances of the case, the CIT(A) erred in deciding the matter based on additional evidences submitted by the assessee in spite of the fact that the assessee could not produce any documents during the assessment proceedings and expressed his inability to produce the same, which is contravened to the provision of Rule 46A(3).
4. For these and such other grounds that may be urged at the time of hearing, it is humbly prayed that the order of the CIT(A), in so far as it relates to the above grounds may be reversed and that of the Assessing Officer be restored.
5. The appellant craves leave to add, to alter, to amend or delete any of the grounds that may be urged at the time of hearing of the appeal.”
During the course of hearing, the ld. counsel for the assessee pointed out that the tax effect involved in this appeal was less than Rs.10 lakhs for the impugned assessment year, therefore by virtue of Circular No.21/2015, dt.10.12.2015, tax effect is below the prescribed limit laid down for filing appeals before this Tribunal.
Ld. DR submitted that para 8 of the Circular was not applicable in this case. Therefore, he did not object to the application of the Circular.
Having carefully examined the orders of lower authorities in the light of rival submissions, we find that the tax effect on the impugned issue is less than Rs.10 lakhs. Para 4 of the Circular No.21/2015 (supra) is reproduced hereunder : “4. For this purpose, “tax effect” means the difference between the tax on the total income assessed and the tax that would have been chargeable had such total income been reduced by the amount of income in respect of the issues against which appeal is intended to be filed (hereinafter referred to as “disputed issues”). However the tax will not include any interest thereon, except where chargeability of interest itself is in dispute. In case the chargeability of interest is the issue under dispute, the amount of interest shall be the tax effect. In cases where returned loss is reduced or assessed as income, the tax effect would include notional tax on disputed additions. In case of penalty orders, the tax effect will mean quantum of penalty deleted or reduced in the order to be appealed against.”
The assessee had not challenged the constitutional validity of any provisions of the Act nor had it challenged the legality of the Circular. Revenue has not brought to our notice anything to show that the appeal arose on an issue emanating from any Revenue Audit Objections accepted by the Department. Addition giving rise to the appeal does not relate to any undisclosed foreign assets / bank accounts. Thus, we find that circular No.21/2015 (supra) is squarely applicable in this case. However if Revenue finds that appeal arises out of issues emanating from audit objection it will be free to file necessary petition seeking recall of this order. With the above observations appeal of the revenue is therefore dismissed.
In the result, the appeal by the revenue is dismissed.
Pronounced in the open court on this 15th December, 2017.