ITO, NEW DELHI vs. M/S. MUKESH MALIK, DELHI

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ITA 460/DEL/2014Status: DisposedITAT Delhi03 August 2016AY 2009-104 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 held that the tax effect in the Revenue's appeal was below the monetary limit prescribed by CBDT Circular No. 21/2015. Therefore, the appeal was not maintainable and should have been withdrawn or not pressed by the Revenue.

What were the facts?

The Department appealed the CIT(A)'s order which had restricted additions made by the AO on account of unexplained cash credit and credit card payments. The assessee did not appear for the hearing.

What were the issues?

Whether the Department's appeal is maintainable given the tax effect is below the prescribed monetary limit as per CBDT circular. The merits of the CIT(A)'s decision regarding unexplained cash credit and credit card payments were not adjudicated.

Which sections of the Income-tax Act were involved?

Section 69

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘E’, NEW DELHI

Before: SHRI H.S. SIDHU & SHRI ANADI N. MISHRA

This appeal by the Department is directed against the Order dated 26.11.2013 of Ld. CIT(A)-XXVII, New Delhi pertaining to assessment year 2009-10 on the following grounds:-

1.

"On the facts and in the circumstances of the case that the order of the Ld. CIT (Appeal) is bad in law and not in consonance with facts of the case".

2. On the facts and in the circumstances of the case, the Ld.CIT (Appeal) erred in restricting the addition to Rs.4,39,736/- out of the total addition made by AO amounting to Rs. 14,58,500/- made by the AO on account of unexplained cash credit u/s 69 of the I.T. Act.

3. On the facts and in the circumstances of the case, the Ld. CIT(Appeal) had erred in granting relief of Rs. 15,29,697/- out of total addition of Rs. 20,36,697/- on account of credit cards payments.

4. On the facts and in the circumstances of the case, the Ld. CIT(Appeal) had erred in considering that the assessee failed to furnish the necessary details/evidence during the course of assessment proceedings. 5 On the facts and in the circumstances of the case, the Ld. CIT(Appeal) had erred in deleting ignoring the statutory provision of section 69 of the Act and granted relief relying upon the peak credit theory, not evolved by the legislature. 6. On the facts and in the circumstances of the case that the Ld.CIT(A) while relying upon peak credit theory, erred in law as well as in the facts the assessee failed to establish the nexus between the credit & debit entries of bank accounts. 7. On the facts and in the circumstances of the case that the Ld.CIT(A) had erred in passing the order without affording opportunities to the AO and also without considering the order passed by the AO. 8. The appellant craves to add, allow or amend any or all the grounds of appeal before or during the course of hearing of the appeal.

2.

In this case, Notice of hearing to the assessee was sent by the Registered AD post, in spite of the same, assessee, nor his authorized representative appeared to prosecute the matter in dispute, nor filed any application for adjournment. Keeping in view the facts and circumstances of the present case and the issue involved in the present Appeal, we are of the view that no useful purpose would be served to issue notice again and again to the assessee, therefore, we are deciding the present appeal exparte qua assessee, after hearing the Ld. DR and perusing the records.

3.

From the above, we find that the tax effect in the Revenue’s Appeal is less than Rs.10,00,000/-, therefore, the Department’s Appeal is not maintainable, in view of the Circular No. 21/2015 dated 10th December, 2015 issued vide F.No. 279/Misc. 142/2007-ITJ (Pt.) by the CBDT. For the sake of convenience, the relevant para nos. 3 & 10 of the aforesaid CBDT’s Circular are reproduced as under:-

“3. Henceforth, appeals/ SLPs shall not be filed in cases where the tax effect does not exceed the monetary limits given hereunder: Monetary Limit S No Appeals in Income-tax matters (in Rs) 1 Before Appellate Tribunal 10,00,000/- 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.

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.”

4.

It is not in dispute that the Board’s instruction or directions issued to the income-tax authorities are binding on those authorities, therefore, the Department should have withdrawn/ not pressed the present Appeal, in view of the aforesaid instructions since the tax effect in the instant Appeal is less than the amount of Rs. 10 lacs, prescribed in the above said CBDT’s Instructions.

5.

Keeping in view the CBDT Instruction No. 21/2015 dated 10th December, 2015, we are of the view that the Revenue should have withdrawn/ not pressed the instant appeal before the Tribunal. We are also of the view that the said Instructions are applicable for the pending appeals and appeals to be filed henceforth in Tribunal. Accordingly, the Revenue’s Appeal is dismissed.

6.

In the result, Appeal filed by the Revenue Stands dismissed.

Order pronounced in the Open Court on 03/08/2016.

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