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Income Tax Appellate Tribunal, DELHI BENCH ‘D’, NEW DELHI
Before: SHRI H.S. SIDHU & SHRI O.P. KANT
Date of Hearing : 31-05-2016 Date of Order : 01-06-2016
ORDER PER H.S. SIDHU, J.M.
The appeal has been filed by the Department and the Cross Objection filed by the Assessee against the order of the Ld. CIT(A)- XXI, New Delhi dated 31.7.2012 relating to assessment year 2008- 08.
2. The Revenue has raised the following grounds in its appeal No. 5168/Del/2012:-
“1. Ld. CIT(A) erred in law and on the facts of the case in deleting the addition of Rs. 84,58,113/- made by the AO to the book profit of the assessee on account of provision of warranty.
2. Ld. CIT(A) erred in law and on the facts of the case in ignoring fact that the assessee did not submit any justification in response to AO’s specific query, vide letter
dated 3.12.2010, as to why provision for warranty should not be added to book profit.
3. Ld. CIT(A) erred in law and on the facts of the case is accepting additional evidence in violation of Rule 46A of the Income Tax Rules.
4. The appellant craves the leave to add, amend, alter
or withdraw any ground(s) of appeal during or before the hearing of appeal.”
3. The assessee has raised the following grounds in its Cross Objection:-
That the Assessee is a public limited company filing
its return of income regularly.
That the Assessee's accounts were duly audited by an independent Chartered Accountant Firm.
That the Assessee filed return of income for the A.Y.2007-08 and declared a total income of Rs.54,61,655/-.
4. That whole of the books of accounts and all
supporting documents were produced during the course of assessment proceedings, which were duly verified by the Ld. Assessing Officer.
5. That while finalizing the assessment, the Ld.
Assessing Officer made an addition of Rs. 90,22,386/- on various grounds.
That the Hon'ble CIT Appeal restricted the addition
made by Assessing Officer from Rs. 90,22,386/- to Rs.
5,64,273 lac after duly satisfying himself on books of accounts and other records which were produced before him.
7. That being aggrieved by the order of the Hon'ble CIT
Appeal, the Appellant has come before your honor and expects full relief therein.
We have heard both the parties and perused the material on record. From the above, we 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.
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.”
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 6.
December, 2015, we are of the view that the Revenue should have withdrawn/ not pressed the instant appeal before the Tribunal. We are 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.
During the hearing, Ld. Counsel of the Assessee did not press the Cross Objection, hence, the same is dismissed as not pressed.
In the result, Appeal filed by the Revenue as well as Cross Objection filed by the Assessee Stand dismissed.
Order pronounced in the Open Court on 01/06/2016.