DCIT, NEW DELHI vs. SH DWARKA PRASAD AGGARWAL, NEW DELHI

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ITA 3684/DEL/2014Status: DisposedITAT Delhi13 June 2016AY 2007-084 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 Department's appeal was not maintainable due to the low tax effect, as per CBDT Circular No. 21/2015. The circular mandates that appeals with a tax effect below a certain monetary limit should not be filed or should be withdrawn.

What were the facts?

The Department appealed against an order of the CIT(A) that deleted additions made by the AO. The additions pertained to deemed dividend and disallowance of interest and depreciation. The tax effect in the Revenue's appeal was less than Rs. 10,00,000/-.

What were the issues?

Whether the Department's appeal is maintainable before the Tribunal when the tax effect is below the prescribed monetary limit. Whether the CIT(A) erred in deleting additions related to deemed dividend and disallowance of interest and depreciation.

Which sections of the Income-tax Act were involved?

Section 2(22)(e),Section 250(4)

AI-generated summary — verify with the full judgment below

Before: SHRI H.S. SIDHU

For Respondent: DR Assessee by :

Date of Hearing : 13-06-2016 Date of Order : 13-06-2016

O R D E R PER H.S. SIDHU, JM This appeal by the Department is directed against the Order dated 18.3.2014 of Ld. CIT(A)-XXXII, New Delhi pertaining to assessment year 2007-08 on the following grounds:-

“1. That the CIT(A) erred in law and on facts of the case in deleting the addition of Rs. 19,03,491/- made by AO on account of deemed dividend u/s. 2(22)(e) of the I.T. Act, 1961. 2. That the CIT(A) erred in not invoking the provisions of Section 250(4) of the Income Tax which empowers Ld. CIT(A) to conduct further enquiry on the issues involved in this case.

3. That the CIT(A) erred in law and facts of the case in deleting the addition of Rs. 2,30,816/- made by AO on account of disallowance of interest and depreciation. 4(a) The order of the CIT(A) is erroneous and not tenable in law and on facts. (b) The appellant craves leave to add, alter or amend any / all of the grounds of appeal before or during the course of the hearing of the appeal.

2.

From the above, I 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.”

3.

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.

Keeping in view the CBDT Instruction No. 21/2015 dated 10th 4. December, 2015, I am of the view that the Revenue should have withdrawn/ not pressed the instant appeal before the Tribunal. I am 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.

5.

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

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