What did the Tribunal hold?

The Tribunal held that the appeal of the revenue was not maintainable as the tax effect was below the threshold stipulated by the CBDT Circular. Therefore, the appeal was dismissed on this technical ground.

The Revenue filed an appeal before the ITAT. The ITAT had previously allowed the appeal for statistical purposes. However, the assessee filed a miscellaneous petition, and the earlier order was recalled due to a low tax effect.

What were the issues?

The primary issue was the maintainability of the revenue's appeal before the ITAT due to a low tax effect, as per CBDT Circular No. 21/2015.

ITO vs Dr. Sushanth Rai | ITAT Bangalore 2016

Income Tax Appellate Tribunal, BANGALORE BENCH ‘C’, BANGALORE

Before: SHRI A. K. GARODIA & SHRI VIJAY PAL RAO

For Appellant: Shri V Srinivasan, Advocate

For Respondent: Shri S. Sundar Rajan, JCIT, Shri V Srinivasan, Advocate

This is assessee’s appeal directed against the order of the ld.

CIT(A), Mysore dated 08-10-2013 for the assessment year 2010-11.

The grounds raised by the assessee are as under;

“1. The order of the ld. CIT(A) is against law and facts of the case. 2. The ld. CIT(A) erred in not considering the fact that cash deposits in bank accounts are not satisfactorily explained, as the assessee prepared & produced books of accounts on the basis of bank entries.

3. The ld. CIT(A) erred in not considering the fact that unexplained investments are not properly explained as the assessee could not explain as to how he could make accounting entries as on 01-04- 2010 when the second valuation report was not available as on that date.

4. Fr these and other grounds that may be urged at the time of hearing, the order of CIT(A) may set aside on this point and that of the AO be restored.

5. The appellant craves leave to add, delete, amend or modify any of the grounds of appeal”.

This appeal of the revenue was earlier decided by the Tribunal as per order dated 20-11-2016 and the appeal of the revenue was allowed for statistical purposes. Later, the assessee has filed MP and as

per order in vide MP No.64(B)/2016 dated 07-03-2016, the earlier Tribunal order was recalled on this basis that the only addition deleted by the ld.CIT(A) in the appellate order relates to a sum of Rs.31.15 lakhs and tax effect of the aforesaid addition works out to Rs.9,93,435/- which is less than Rs.10.00 lakhs and as per the Board’s Circular No.21/2015 dated 10-12-2015, the appeal of the revenue is not maintainable as the tax effect is less than Rs.10.00 lakhs and therefore, there is a mistake apparent in the Tribunal order. Accordingly, the Tribunal order dated 20-01-2016 was recalled.

Now we have to decide the appeal of the revenue afresh.

Ld. DR of the revenue supported the assessment order whereas the ld. AR of the assessee supported the order of the ld. CIT(A) and he also submitted that because of the low tax effect, the appeal of the revenue should be dismissed.

We have considered the rival submissions and we find force in the submissions of the ld. AR of the assessee because admittedly, the tax effect in the present case is below Rs.10.00 lakhs and therefore, as

per the Board’s Circular No.21/2015 dated 10-12-2015, the appeal of the revenue is not maintainable, if the tax effect is blow Rs.10.00 lakhs and this Circular is applicable to pending appeals also. Accordingly, we dismiss the appeal of the revenue because of low tax effect.

In the result, the appeal of the revenue is dismissed.

Order pronounced in the open court on the date mentioned on the caption page.

ITO vs. DR. SUSHANTH RAI,

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