What did the Tribunal hold?

The Tribunal held that the appeal was not maintainable in view of CBDT Circular No. 21/2015, which stipulates that appeals shall not be filed where the tax effect does not exceed Rs. 10,00,000/- before the Appellate Tribunal. The Department should have withdrawn or not pressed the appeal.

What were the issues?

The primary issue was whether the Department's appeal was maintainable before the Tribunal given the low tax effect, as per the prevailing CBDT circular.

DCIT vs M/S. Salora Retail Ventures Ltd… | ITAT Delhi 2016

Q: What were the facts?

The Department appealed against the deletion of an addition made by the AO on account of disallowance of advertisement and sales promotion expenditure. The tax effect in the Revenue's appeal was found to be less than Rs. 10,00,000/-.

Income Tax Appellate Tribunal, DELHI BENCH ‘D’, NEW DELHI

Before: SHRI H.S. SIDHU & SHRI J.S. REDDY

This appeal by the Department is directed against the Order dated 1.10.2013 of Ld. CIT(A)-X, New Delhi pertaining to assessment year 2009-10 on the following grounds:- “

1. On the facts and in the circumstances of the case the ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 16,48,244/- made by the AO on disallowance of advertisement and sales promotion expenditure.

3. 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.”

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.

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.”

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 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.

In the result, Appeal filed by the Revenue Stands dismissed. Order pronounced in the Open Court on 11/5/2016.

DCIT, NEW DELHI vs. M/S. SALORA RETAIL VENTURES LTD., NEW DELHI

What did the Tribunal hold?

What were the facts?

What were the issues?

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