ITO 21(3)(3), MUMBAI vs. MAFRUNISHA R. KHAN, MUMBAI

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ITA 1904/MUM/2013Status: DisposedITAT Mumbai25 July 2016AY 2008-093 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal noted that the tax effect was below the monetary limit prescribed by the CBDT circular for filing appeals. Therefore, the appeal was not maintainable and was dismissed.

What were the facts?

The Revenue filed an appeal against the CIT(A)'s order for AY 2008-09. The primary issue was the alleged failure of the assessee in deducting tax at source, leading to disallowance under Section 40(a)(ia).

What were the issues?

Whether the Revenue's appeal is maintainable given the low tax effect, as per CBDT circulars. The core issue of TDS failure was not adjudicated on merits.

Which sections of the Income-tax Act were involved?

Section 40(a)(ia)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES “B”, MUMBAI

Before: SHRI R.C. SHARMA(AM) & SHRI SANDEEP GOSAIN (JM)

For Appellant: Shri. Randhir Gupta
Hearing: 25/07/2016Pronounced: 25/07/2016

The present appeal has been filed by the Revenue against the order of Ld. Commissioner of Income Tax (Appeals)-32, Mumbai, dated 31/12/2013 for the assessment year 2008-09.

2.

None appeared on behalf of the Assessee however, Shri Randhir Gupta, Departmental Representative (DR) is present in the court on behalf of the Revenue.

3.

The main issue raised in this appeal is with regard to alleged failure of the assessee in deduction of tax at source while making the payment by the assessee and its consequent disallowance u/s 40(a)(ia).

3.1. It is noted by us that tax effect in this case is apparently less than Rs. 10,00,000/-.

3.2. We have gone through the aforesaid circular of the Board. It has been provided in the aforesaid circular that no appeal shall be filed by the Revenue if the tax effect involved in the appeal does not exceed a sum of Rs. 10 Lacs. It has further been provided that instructions contained therein shall apply retrospectively to pending appeals also. Relevant part of the circular is reproduced below:

“10. This instruction will apply retrospectively to pending appeals and appeals to be filed henceforth in High Courts/ Tribunal. Pending appeals below the specified tax limits in para 3 above may be withdrawn/ not pressed.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.”

3.3. It is confirmed by the Ld. DR that tax effect in this case is less than the amount of Rs.10,00,000/-. As per law, circular of CBDT has binding effect on the income tax authorities.

3.4. In view of the above, we find that the appeal of the Revenue is not maintainable. Therefore, we dismiss the same.

3.5. However, with a view to follow principles of natural justice, we give liberty to the Revenue to file Miscellaneous Application u/s 254 in case tax effect is found to be more than Rs. 10,00,000/-. Further, our order shall have no bearing on the merits of the case.

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