What did the Tribunal hold?

The Tribunal noted that the tax effect was below the threshold stipulated in Circular No. 21/2015 for filing appeals. As no exceptions applied, the circular was deemed applicable.

The Revenue filed an appeal against an order of the CIT(A) for AY 2005-06. The tax effect involved in the appeal was found to be less than Rs. 10 lakhs.

What were the issues?

Whether the Revenue's appeal should be dismissed based on the tax effect being below the limit prescribed by the CBDT's circular.

ITO vs M/S Ethnic Silk Mills | ITAT Bangalore 2016

Income Tax Appellate Tribunal, BANGALORE BENCH A, BANGALORE

Before: SHRI. ABRAHAM P. GEORGE & SHRI. VIJAYPAL RAO

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH 'A', BANGALORE BEFORE SHRI. ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI. VIJAYPAL RAO, JUDICIAL MEMBER (Assessment Year : 2005-06) Income tax Officer, Ward -4(3)(4), Bangalore .. Appellant v. M/s. Ethnic Silk Mills, No.22/48, Bertena Agrahara Village, Begur Hobli, Hosur Road, Bangalore 560 068 ..Respondent PAN : AABFE3205E Assessee by : None Revenue by : Shri. L. V. Bhaskar Reddy, JCIT Heard on : 06.01.2016 Pronounced on : 06.01.2016 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER :

This is an appeal filed by Revenue directed against order dated 21.04.2015 of CIT (A)-4, Bangalore, for the A. Y. 2005-06.

ITA.1293/B/2012 Page - 2

Nobody appeared on behalf of the assessee. When the appeal was taken up for hearing , the Bench pointed out to the Ld. DR that tax effect involved in this appeal was less than Rs.10 lakhs for the impugned assessment year, therefore by virtue of Circular No.21/2015, dt.10.12.2015, is below the limit laid down for filing appeals before this Tribunal.

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.

We have perused the orders and heard the Ld. DR. 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.”

The tax effect on the issues that are disputed by the Revenue is less than Rs.10 lakhs for the impugned assessment year. Assessee had not challenged the constitutional validity of any provisions of the Act nor had it ITA.1293/B/2012 Page - 3 challenged the legality of the Circular. 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 appeal does not relate to any undisclosed foreign assets / bank accounts. Thus we find that circular No.21/ 2015 (supra) is squarely applicable in this case. However if Revenue find that appeal arise out of issues emanating from audit objection it will be free to file MP for recalling this order.

With the above observations appeal of the Revenue is therefore dismissed.

Pronounced in the open court on this 6th day of January, 2016.

ITO, BANGALORE vs. M/S ETHNIC SILK MILLS, BANGALORE

What did the Tribunal hold?

What were the facts?

What were the issues?

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