DCIT, CIRCLE - 23, HOOGHLY, HOOGHLY vs. M/S. DISHA EYE HOSPITAL (HOOGHLY) PVT. LTD., HOOGHLY

This appeal of revenue is time barred by 10 days and a condonation petition along with an affidavit has been filed by the revenue explaining the reasons for delay in filing the appeal. After considering the condonation petition and the concession given by the Ld. AR, we condone the delay and appeal is admitted for hearing.

At the outset itself, the ld. Counsel for the assessee brought to our notice that the tax effect in this case comes to less than Rs. 10 lacs and also pointed out that education cess @ 3% even if included it will be below the tax effect of Rs. 10 lacs. He also drew our attention to the decision of ITAT, Delhi Bench in ACIT Vs. M/s. Dallas Finance Ltd. for AY 2007-08 dated 07.04.2017 wherein a question arose as to whether education cess should be included when considering the tax effect of Rs. 10 lacs. The Tribunal held that “In our view, surcharge and education cess shall not be include in word ‘tax’ for the purpose of examining of tax effect as envisaged in circular of Board dt. 10th December, 2015 No. 21/2015. Thus, the tax effect being less than 10 lakhs, impugned 2 Disha Eye Hospital (Hooghly) Pvt. Ltd.., AY: 2011-12 appeal filed by the revenue is not maintainable and therefore same is hereby dismissed. Our order has no effect on the merits of this case.”

We find that the appeal of the revenue falls in the ken of the CBDT Circular no. 21/2015 dated 10.12.2015, wherein the CBDT has directed the department to withdraw/not press the appeal if the tax effect is less than Rs. 10 lacs before the ITAT. On perusal of the Circular No. 21 / 2015 dated 10.12.2015 and the materials available on record, we find that the revenue’s case does not fall under any of the exception clause as provided in the circular, as this is covered. We also find that the Circular makes it very clear that the revised monetary limits shall apply retrospectively to pending appeals also. We find that the Circular is binding on the tax authorities. This position has been confirmed by the Hon’ble Apex Court in the case of Commissioner of Customs vs Indian Oil Corporation Ltd reported in 267 ITR 272 (SC). Hence, we hold that the appeal of the revenue deserves to be dismissed in terms of low tax effect vide Circular No.21 / 2015 dated 10.12.2015. Accordingly, this being a low tax effect case, we dismiss this appeal of revenue in limine, as unadmitted, without going into the merits of the case. In case the revenue later finds that the tax effect is more than Rs. 10 lakhs then it is at liberty to move appropriate application to recall this order. With this Caveat, we are inclined to dismiss this appeal of the revenue on the ground that it is below the tax effect of less than Rs.10 lakh.