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Income Tax Appellate Tribunal, DELHI BENCH ‘C’ : NEW DELHI
Before: SHRI H.S. SIDHU & SHRI ANADI N MISHRA
appeal sought to set aside the impugned order dated 08.09.2015 passed by the Commissioner of Income-tax (Appeals), Meerut for the assessment year 2010-11 on the following grounds :- “1. Whether in the facts and circumstances of the case, the Ld. Commissioner of Income Tax (Appeals), Meerut has erred in law and on fact in deleting the addition of Rs.13,61,723 made by the AO. on the basis of Gross Profit worked out by him since the books of accounts were rejected by him u/s 145(3) of the I.T. Act, 1961, as there was a gross discrepancy in the sales prices of the goods and profits earned on sales made in 1st and 2nd halves of the year and this variation is not possible in same trade of similar items during the same year.
2. Whether in the facts and circumstances of the case, the Ld. Commissioner of Income Tax (Appeals), Meerut has erred in law and fact in deleting the addition of Rs.37,807/- which had been made by the A.O. on proportionate basis as interest which had not been charged on loans advanced by the assessee.
3. Whether in the facts and circumstances of the case, the Ld. Commissioner of Income Tax (Appeals), Meerut has erred in law in deleting the addition of Rs.40,289/- made by the AO on account of disallowance of 10% of various expenses debited in the P & L A/c without considering the fact that the books of accounts had been rejected by the AO and the various vouchers produced by the assessee were either self made or were not found to be satisfactorily made for which the assessee could not furnish any satisfactory reply.
4. Whether in the facts and circumstances of the case, the Ld. Commissioner of Income Tax (Appeals), Meerut has erred in law and in facts in deleting the addition of Rs.1,38,325/- made by the AO. on account of disallowance of deduction u/s 80IC of the I.T. Act, 1961, without considering the fact that the assessee did not produce inspection reports of Government Departments in respect of materials purchased by them and also details of scrap sale during the relevant AY., inspite of opportunity having been granted to him to produce the same, causing the A.O. to draw the conclusion that no manufacturing activity was carried out by the assessee during the said previous year.
Whether in the facts and circumstances of the case, the order of the Ld. Commissioner of Income Tax (Appeals), Meerut may be set aside and that of the AO be restored.
That the appellant craves leave to add, modify and/or delete any grounds of appeal
.”
2. When the appeal came up for hearing, the ld. Authorised Representative of the respondent assessee contended at the outset that tax effect in this appeal was below Rs.10 lakhs. He also drew our attention to CBDT Instruction No.21/2015 dated 10th December, 2015 in which Revenue has been directed not to file any appeal in Income Tax Appellant Tribunal if tax effect is less than Rs.10,00,000/-. The Ld. Authorised Representative contended that the appeal of the Revenue may be dismissed in the light of CBDT Circular (supra). The ld. Departmental Representative appearing for Revenue agreed that the tax effect in this appeal filed by Revenue is less than Rs.10 lakhs. He also agreed that aforesaid instruction of CBDT dated 10.12.2015 was applicable in this appeal; and agreed that the appeal has become infructuous in view of this CBDT instruction.
We have heard parties on the issue in controversy and perused the material on record. Perusal of CBDT Circular (supra) shows that monetary limit for filing the appeal by the Department before the Tribunal, Hon'ble High Court and Hon'ble Supreme Court has been revised and the relevant portion of the aforesaid circular is extracted as under:
"3. Henceforth, appeals/SLPs shall not be filed in cases where the tax effect does not exceed the monetary limits given hereunder: S.No. Appeals in Income-tax Monetary matters Limit (Rs.) 1 Before Appellate 10,00,000 Tribunal 2 Before High Court 20,00,000 3 Before Supreme Court 25,00,000 It is clarified that an appeal should not be filed merely because the tax effect in a case exceeds the monetary limits prescribed above. Filing of appeal in such cases is to be decided on merits of the case.
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."
In view of the CBDT Circular No.21 dated 10.12.2015 having retrospective effect and what has been discussed above, we are of the considered view that the aforesaid appeal is not maintainable because of low tax effect i.e. less than Rs.10,00,000/- hence, the aforesaid appeal filed by the Revenue is hereby dismissed in limine having been become infructuous. However, in case any fact which is otherwise not on record, warrants the restoration of the present appeal, the Revenue is at liberty to approach the Tribunal under relevant provisions of law.
Order pronounced in open court on this 28th day of October, 2016.