ACIT, NEW DELHI vs. M/S. ALFA BHOJ LTD., NEW DELHI

The CIT(A) in the respective aforesaid orders has quashed the penalty u/s 271(1)(c) of Rs.6,73,500/-; Rs. 2.70 Lacs odd and Rs.4,30,500/- in the years under consideration respectively. Mr.K.R.Manjani, Adv. appearing on behalf of the assessee submitted that the departmental appeal is in contravention to the CBDT Circular No.21/2015 dated 10th December, 2015. The Ld. CIT DR, Mr. Ravi Jain fairly conceded that the departmental appeals have been filed wherein the tax effect involved is much less than Rs.10 lakh.

We have heard the submissions of the parties on this issue and perused the material on record. We find that the CBDT vide the aforesaid Circular dated 10.12.2015 has revised the monetary limit to Rs.10 lakh for filing the appeal by the department before Income Tax Appellate Tribunal. Vide para 10 of the aforesaid Circular Para 3 has been made applicable retrospectively. We find that in para 3 in the afore-said circular the CBDT has specifically made clear that in the case of penalty order, the tax effect will mean the quantum deleted or reduced in the order to be appealed against. Considering the settled legal precedent that the Board’s instructions or directions issued to the Income Tax Authorities u/s 268A of the Income Tax Act, 1961 are binding on the authorities, we dismiss the departmental appeals considering the material available on record.

In the result, the appeals of the Revenue are dismissed.