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Facts
The Department appealed an order that allowed the assessee's claim for deduction under Section 54F of the Income Tax Act, 1961. The Assessing Officer had disallowed the deduction, treating the utilization of sale consideration for a new residential property and a home loan as not meeting the conditions of Section 54F. The CIT(A) however, found that the assessee sold their original property and owned only one house property at the time of purchase, thus fulfilling the conditions.
Held
The Tribunal noted that the appeal by the Department had a low tax effect, below the mandatory monetary limit set by CBDT Circular No. 09 of 2024 for filing appeals before the Income Tax Appellate Tribunal. The Department's counsel conceded that the appeal did not fall under any exceptions.
Key Issues
Whether the appeal filed by the Department is maintainable given the low tax effect as per CBDT circulars?
Sections Cited
54F, 143(2), 142(1)
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Income Tax Appellate Tribunal, JAIPUR BENCHES, “A-Bench” JAIPUR
Before: DR. MITHA LAL MEENA, AM, & SHRI NARINDER KUMAR, JM vk;dj vihy la-@ITA No. 862/JPR/2024
vkns'k@ORDER PER: NARINDER KUMAR, JUDICIAL MEMBER Present appeal has been filed by the Department, ACIT, Circle7, Jaipur, feeling aggrieved by the order dated 25.04.2024, relating to assessment pertaining to assessment year 2017-18.
Vide impugned order, Learned CIT(A), NFAC, Delhi allowed the appeal filed by the assessee, while observing that the assessee-appellant ACIT vs. Sh. Pradeep Kumar Gupta was found to have fulfilled the conditions to claim deduction u/s 54F of the Income Tax Act, 1961 (hereinafter referred to as “the Act”).
3. The assessee was before Learned CIT(A), NFAC feeling dissatisfied with the assessment order dated 16.12.2019 passed by the Assessing Officer, ACIT, Circle-7, Jaipur. By way of assessment order, the Assessing Officer made addition of Rs. 2,27,07,651/- by way of disallowance of deduction of the said amount claimed u/s 54F of the Act. As per record, the assessee had declared income to the tune of Rs. 84,21,750/-.
Arguments heard. File perused.
In brief, the facts as available from the assessment order are that the case of the assessee was selected for limited scrutiny (CASS), whereupon notice u/s 143(2) of the Act was issued; said notice was followed by notice u/s 142(1) of the Act, accompanied by questionnaire. The assessee furnished reply to the said notice and also provided details/information required by the Assessing Officer from time to time. As per assessment order, in the financial year 2016-17, the assessee was found to have sold a property for consideration of Rs. 3,40,00,000/-, and in this regard, the assessee declared net long term capital gain of Rs. 72,62,771/- by claiming deduction of Rs. 2,27,07,651/- u/s 54F of the Act.
ACIT vs. Sh. Pradeep Kumar Gupta As per assessment order, the assessee is stated to have claimed deduction of Rs. 1,81,10,961/- on account of purchase of new residential property i.e. Flat No. 607, 6th Floor, A-4, Airport enclave Scheme, Jaipur, in his name and in the name of his wife Smt. Shashi Gupta, jointly.
The Assessing Officer observed in the impugned assessment that Shashi Gupta had availed of home loan to the tune of Rs. 1.5 Crore from ICICI Bank on 22.06.2016 for the purchase of new residential property i. e. the above said property, and the loan being still active, payments being made from time to time from the said home loan, the sale consideration received, as mentioned above, could not be said to have been utilized by the assessee for purchase of new residential property. As a result, the Assessing Officer declined the deduction of Rs. 1,81,10,961/-, said to have been deposited in capital gain account scheme in violation of the provisions of Section 54F of the Act.
When the matter came up before Learned CIT(A), NFAC by way of appeal by the assessee, it was observed that the assessee had sold original asset on 03.08.2016 and on that date, he was owning only one house property i.e. 8B, Swastik Moti Doongri Road, Jaipur, and as such, he fulfilled the condition to claim deduction u/s 54F of the Act.
ACIT vs. Sh. Pradeep Kumar Gupta 8. Today, when the appeal has been taken up, Ld. DR for the appellant has stated at Bar that this is a matter involving low- tax- effect as per CBDT Circular No. 09 of 2019, dated 17th of September, 2024.
As per abovesaid circular recently issued by CBDT, the mandatory limit of filing of appeal before the Income Tax Appellate Tribunal is Rs. 60,00,000/-. Ld. DR for the Department has also candidly submitted at the Bar that the present appeal, as regards mandatory limit are concerned, does not fall in any of the exceptions prescribed in the Circular No.5 dated 15.3.2024 issued earlier.
As per Form No.36, total tax effect is Rs. 56,29,880/-. On behalf of the assessee-respondent, calculation of tax has been submitted to depict tax effect.
As per CBDT Circular No.09 of 2024 monetary limit for filing appeals before the Income Tax Appellate Tribunal is Rs. 60,00,000/-. Relevant Paras 2, 3 & 5 of said Circular read as under:- “2. As a step towards management of limitation, it has been decided by the Board to revise the monetary limits for filing of appeals in Income-tax cases as stated in para 4.1 of the aforementioned Circular as follows:- Sl. No. Appeals/SLPs in Income-tax matters Monetary Limit (Tax effect in Rs.)
Monetary limits given in paragraph 2 above with regard to filing appeal/SLP shall be applicable to all cases including those relating to TDS/TCS under the Income-tax Act, 1961 with exceptions as per paras 3.1 and 3.2 of Circular No. 5/2024 dated 15.03.2024, where the decision to appeal/file SLP shall be taken on merits, without regard to the tax effect and the monetary limits.” 5. The modifications shall come into effect from the date of issue of this Circular. This Circular will apply to SLP/appeals to be filed henceforth in SC’HCs/Tribunal. It shall also applyto the SLPs/appeals pending before Supreme Court/High Courts/Tribunals, which may accordingly be withdrawn.” Result
Accordingly, this appeal filed by the department is hereby dismissed as deemed to have been withdrawn due to low tax effect.