DCIT, NEW DELHI vs. M/S. RAMESHWAR CHAIN & JEWELLERY PVT. LTD., DELHI

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ITA 1085/DEL/2010Status: DisposedITAT Delhi08 February 2016AY 2006-074 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 held that the Department's appeal was not maintainable as the tax effect was below the monetary limit prescribed by the CBDT circular. The circular was applicable retrospectively to pending appeals.

What were the facts?

The Department appealed an order of the CIT(A) which had annulled the assessment. The assessee argued that the appeal was not maintainable due to low tax effect as per CBDT circulars.

What were the issues?

Whether the Department's appeal is maintainable before the Tribunal based on the tax effect and CBDT circulars. Whether a branch or unit is covered under the definition of 'person' in the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 139(1),Section 2(31)

AI-generated summary — verify with the full judgment below

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

Before: SHRI H.S. SIDHU & SHRI L.P. SAHU

This appeal by the Department is directed against the Order dated 4.12.2009 of Ld. CIT(A)-III, New Delhi pertaining to assessment year 2006-07 on the following grounds:- “

1. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and on facts in annulling the assessment u/s. 143(3) by holding that no search warrant was issued in the name of the assessee.

2. Whether on the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in ignoring that search warrant was issued in name of Vikas Diamond Company which is a unit of the assessee company, owned and run by it?

3. Whether on the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts by holding that Branch or unit is not covered in the definition of a person in section 2(31) of the I.T. Act ?

4.

Whether on the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in ignoring that the assessment for AY 2006-07 has been completed u/s. 143(3) on the basis of return filed by the assessee u/s. 139(1) of the Act? 5. The orders of the CIT(A) is erroneous and not tenable in law and on facts. 6. The appellant craves leave to add, alter or amend any / all of the grounds of appeal

before or during the course of hearing of the appeal.”

2. At the threshold, Ld. Counsel of the Assessee stated that the tax effect in this appeal is less than the prescribed limit fixed by the CBDT, hence, the Revenue’s Appeal is not maintainable and may be dismissed accordingly. 2.1 On the other hand, Ld. DR did not controvert the submissions made by the Ld. Counsel of the assessee.

3. We have heard both the parties and perused the records. We find considerable cogency in the submissions of the Ld. Counsel of the assessee 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.” 4. 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. 5. 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. 6. In the result, Appeal filed by the Revenue Stands dismissed. Order pronounced in the Open Court on 08/02/2016.

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