DCIT 14(3)(1), MUMBAI vs. R. D. WELD PRODUCTS P.LTD, MUMBAI

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ITA 5328/MUM/2015Status: DisposedITAT Mumbai12 October 2017AY 2011-122 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal noted that CBDT Circular No. 21/2015 directs that no appeal should be filed if the tax effect does not exceed Rs. 10 lakhs, and this instruction applies to pending appeals. Therefore, the Revenue was not supposed to press the appeal.

What were the facts?

The Revenue filed an appeal before the ITAT against an order of the CIT(A) for AY 2011-12. The tax effect on the income under dispute was less than Rs. 10 lakhs.

What were the issues?

Whether the Revenue's appeal should be dismissed in limine due to low tax effect as per CBDT circular, despite the merits of the case.

Which sections of the Income-tax Act were involved?

Section 268A

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, D Bench, Mumbai

Before: Shri P K Bansal & Shri R.L. Negi

For Appellant: Shri Purushottam Kumar
Hearing: 12.10.2017Pronounced: 12.10.2017

Per P.K. Bansal, Vice President

1.

This appeal has been filed by the Revenue against the order of the CIT(A)-22, Mumbai dated 20.08.2015 for A.Y. 2011-12.

2.

At the very outset, we noted that in this case the tax effect on the income under dispute is less than Rs.10 lakhs. We further noted that the Central Board of Direct Taxes vide Circular No. 21/2015 dated 10th December, 2015 file No. 279 of Misc. 142/2007–ITJ (PT) has issued the direction in supersession of the Instruction No.5/2014 dated 10/07/2014 in pursuance with the power entrusted u/s. 268A of the Income Tax Act, that no appeal should be filed before this Tribunal in case tax effect does not exceed Rs.10 lakhs. The “tax effect” in this regard means the difference between the tax on the total income assessed and the tax that what have been chargeable had such total income been reduced by the amount of income in respect of issues against which appeal is intended to be filed. This circular further states that tax will not include any interest thereon the chargeability of interest itself is in dispute. We further noted that M/s. R.D. Weld Products P. Ltd. under paragraph 10 which is reproduced as under, it has been mentioned in the circular that this instruction will apply even to the pending appeals. “10. This instruction will apply retrospectively to pending appeals and appeals to be filed henceforth in High Courts/Tribunals. Pending appeals below the specified tax limits in para 3 above may be withdrawn/not pressed. Appeals before the Supreme Court will be governed by the instructions on this subject, operative at the time when such appeal was filed.”

3.

In the impugned case, we noted that the tax effect on the issue under dispute does not exceed Rs.10 lakhs. In view of this fact as per the instruction, the Revenue is not supposed to press the appeal. We, therefore, dismiss the appeal filed by the Revenue in limine without going into the merits of the case as in our opinion the circulars issued by CBDT are binding on the departmental officers in view of the provisions of Section 268A(1) of the Act. The said view has been taken by Hon’ble Supreme Court in the case of Navneet Lal Zaveri Vs. AAC 56 ITR 198 (SC). We accordingly dismiss the appeal filed by the Revenue.

4.

In the result, the appeal of the Revenue stands dismissed.

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