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Facts
The revenue appealed against the CIT(A)'s order for AY 2018-19, raising grounds related to the deletion of additions for unsecured loans and unaccounted interest income, and the direction to give TDS credit as per Form 26AS. The assessee filed a cross-objection.
Held
The Tribunal condoned the delay in filing the revenue's appeal. However, based on CBDT Circular No.17 of 2019, which sets a monetary limit for appeals, the Tribunal found the tax effect in this case to be less than Rs. 50 lakhs. Therefore, the revenue's appeal was dismissed.
Key Issues
Whether the revenue's appeal is maintainable considering the tax effect below the threshold limit stipulated by CBDT Circular No.17 of 2019.
Sections Cited
199, 37 BA
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Income Tax Appellate Tribunal, “C’’ BENCH: BANGALORE
Before: SHRI CHANDRA POOJARI & SHRI KESHAV DUBEY
Date of Hearing : 17.05.2024 Date of Pronouncement : 17.05.2024 O R D E R
PER CHANDRA POOJARI, ACCOUNTANT MEMBER:
This appeal by revenue and CO by assessee are directed against order of NFAC for the assessment year 2018-19 dated 2.8.2023. The revenue has raised following grounds of appeal:
1. The CIT(A) erred in deleting the addition made on unexplained credits being unsecure loan of Rs.6,00,000/- from M/s. YD Laxman HUF as M/s. YD Laxman HUF failed to file balance sheet along with his income tax return.
2. The order of the learned CIT(A) is opposed to law and facts of the case.
3. The CIT(A) erred in deleting the addition made on unaccounted interest income of Rs.4,13,26,123/- as the assessee has not claimed carry forward of TDS to next year on the advance interest received
4. The CIT(A) erred in directing the AO to give TDS credit as per Form 26AS, whereas as per the provisions of section 199 rws Rule 37 BA, the assessee is CO No.4/Bang/2024 Umesh Rohra, Bangalore Page 2 of 4 eligible for TDS credit only in the year in which corresponding income is offered to tax 5. For these and other grounds that may be urged upon, the order of the CIT(A) may be reversed and that assessment order to be restored. Total Tax effect Rs.1,87,98,903/-
The assessee has raised following grounds of appeal in the cross objection:
1. The order passed by the learned Commissioner of Income-tax [Appeals] is just and proper and the same requires to be upheld under the facts and circumstances of the case.
2. The appeal filed by the appellant is not maintainable as the tax effect is less than the threshold limit of Rs.50 lakhs on the facts and circumstances of the case.
3. Grounds on Unsecured loan of Rs.6,00,000/-:
a. learned CIT(A) has rightly deleted the addition of Rs.6,00,000/being unsecured loan obtained from M/S YD Laxman HUF after examining the financials of the loan creditor and appreciated source of cash withdrawals, returned income of the year were sufficient to make advances to the respondent on the facts and circumstances of the case b. The learned CIT(A) has appreciated that there was no requirement for the loan creditor to file balance sheet along with the return of income since it was already filed during the course of assessment proceedings on the facts and circumstances of the case.
Grounds on TDS credit, Rs.36,50,166/-
c. The learned CIT(A) was justified in directing the learned assessing officer to give credit for the prepaid taxes as appearing in form 26AS since the revenue has given NIL tax credit on the facts and circumstances of the d. Without prejudice and not conceding that the TDS credit has been claimed properly, if the provision of section 199 r.w.s 36BA is applied, then the TDS credit shall be allowed in subsequent year, on the facts and circumstances of the case. e. Without further prejudice, the learned CIT(A) has appreciated the proposition of the respondent that making addition in one year without corresponding adjustment in the preceding or succeeding year would result in unjust enrichment and thus revenue neutral on the facts and circumstances of the case.
CO No.4/Bang/2024 Umesh Rohra, Bangalore Page 3 of 4 5. The Respondent / Cross Objector craves leave to add, alter, delete, substitute or modify any of the grounds urged above. 6. For the above and other grounds that may be urged at the time of the hearing of the appeal, the Respondent / Cross Objector prays that the cross appeal may be allowed in the interest of equity and justice.”
There was a delay of 75 days in filing the appeal by department before this Tribunal. The department filed a condonation petition stating that the concerned AO was deputed for investigation duty and later he was busy in completing the time barred assessments and penalty orders, thus there was a delay of 75 days in filing the appeal before this Tribunal.
4. We have gone through the condonation petition filed by the department for the delay of 75 days in filing the appeal before this Tribunal. We find that there is a good and sufficient reason in filing the appeal belatedly by ld. AO before this Tribunal. Accordingly, we condone the short delay of 75 days and admit the appeal for adjudication. 4.1 At the time of hearing, both the parties fairly conceded that tax involved in the appeal filed by the department is less than Rs.50 lakhs. As such, the CBDT Circular No.17 of 2019 dated 8.8.2019 is binding on the department which precludes the department in filing the appeal before this Tribunal as the tax effect in this appeal is less than Rs.50 lakhs which includes TDS amount of Rs.36,50,166/- and another 30% tax on Rs.6 lakhs, which is disallowance of unsecured loan. The total tax effect involved in this appeal is Rs.38,30,166/-. Thus, in view of the Circular of CBDT cited (supra), we dismiss the appeal of the department. 5. Since CO filed by the assessee is with regard to filing appeal by the department that the tax effect is less than Rs.50 lakhs, the CO filed by the assessee is allowed.
CO No.4/Bang/2024 Umesh Rohra, Bangalore Page 4 of 4 5.1 Further, we make it clear that the assessee shall not seek any adjustment of TDS of Rs.36,51,166/- in any assessment year other than the AY 2018-19. Ordered accordingly. 6. In the result, appeal of the revenue id dismissed and CO filed by the assessee is allowed. Order pronounced in the open court on 17th May, 2024