ASST. DIT, BANGALORE vs. M/S MAST INDUSTRIES (FAR EAST) PVT. LTD., BANGALORE

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ITA 973/BANG/2014Status: DisposedITAT Bangalore24 March 2016AY 2008-094 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal noted that the tax effect was below the prescribed limit and the appeal did not involve any exceptional circumstances mentioned in the circular. Therefore, the appeal was dismissed as not pressed.

What were the facts?

The Revenue filed an appeal before the ITAT against an order of the CIT(A). The assessee pointed out that the tax effect involved in the appeal was less than Rs. 10 lakhs, which is below the threshold stipulated in CBDT Circular No. 21/2015.

What were the issues?

The primary issue was whether the Revenue's appeal should be entertained given the low tax effect, as per CBDT circulars. The applicability of CBDT Circular No. 21/2015 was central to the decision.

Which sections of the Income-tax Act were involved?

Section 268A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘a’ BENCH : BANGALORE

Before: SHRI VIJAY PAL RAO & SHRI INTURI RAMA RAO

For Appellant: Shri K.R.,Vsasudevan, Advocate
For Respondent: Shri K.R.,Vsasudevan, Advocate

This appeal has been filed by the revenue directed against the order dated 30-05-2014 of CIT (A)-IV, Bangalore, for assessment year 2008-09.

2.

When the appeal was taken up for hearing learned counsel for the assessee pointed out to the learned DR that tax effect involved in this appeal is less than Rs.10 lakhs for the impugned assessment year and therefore, by virtue of Circular No.21/2015, dated10.12.2015, issued by the CBDT in exercise of the powers conferred in it by subsection (1) of S.268A, we are of the view that the appeal filed herein should not have been pressed by the Revenue. The Learned Departmental Representative fairly admitted that the revenue effect in this appeal is less than the prescribed limit in para-3 of the above circular issued by the CBDT. Having regard to the circumstances of the case, we dismiss the appeal of the revenue as withdrawn/not pressed, as pronounced in the open court.

3.

However, the revenue is at liberty to move appropriate application/petition in case, it is found that the case is covered by one of the exception(s) carved out in the said Circular.

4.

Ld. DR submitted that para 8 of the circular was not applicable in this case. Therefore he did not object to the application of the circular. However Ld DR stated that existence or not of any revenue audit objections leading to the filing of the appeal needed to be ascertained.

5.

We have perused the orders and heard the contentions. Para 4 of the circular No.21/2015 (supra) is reproduced hereunder :

“4. For this purpose, “tax effect” means the difference between the tax on the total income assessed and the tax that would have been chargeable had such total income been reduced by the amount of income in respect of the issues against which appeal is intended to be filed (hereinafter referred to as “disputed issues”). However the tax will not include any interest thereon, except where chargeability of interest itself is in dispute. In case the chargeability of interest is the issue under dispute, the amount of interest shall be the tax effect. In cases where returned loss is reduced or assessed as income, the tax effect would include notional tax on disputed additions. In case of penalty orders, the tax effect will mean quantum of penalty deleted or reduced in the order to be appealed against.”

6.

The tax effect on the issues that is disputed by the revenue is less than Rs.10 lakhs for the impugned assessment year.

Constitutional validity of any provisions of the Act or Rules nor the legality or vires of any Board order, Notification, Instruction or Circular was an issue before the lower authorities. The revenue has not brought to our notice anything to show that the appeal arose on an issue emanating from any Revenue Audit Objections accepted by the Department. Addition giving rise to the appeals does not relate to any undisclosed foreign assets / bank accounts. Thus we find that the circular No.21/ 2015 (supra) is squarely applicable in this case.

However if Revenue, at a later stage find that appeal arise out of issues emanating from audit objection it will be free to file MP for recalling this order.

7.

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

Order pronounced in the open court on 24th March, 2016.

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