DCIT, NEW DELHI vs. M/S. VIPUL LTD., GURGAON

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ITA 5107/DEL/2013Status: DisposedITAT Delhi08 February 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 found merit in the assessee's submission that the tax effect was below the prescribed limit. Following CBDT Circular No. 21/2015, the Tribunal held that the Department's appeal was not maintainable.

What were the facts?

The Department appealed an order of the CIT(A) concerning assessment year 2008-09. The assessee argued that the tax effect was below the monetary limit prescribed by the CBDT for filing appeals.

What were the issues?

The primary issue was the maintainability of the Department's appeal due to a low tax effect, as per CBDT circulars. The appeal also raised grounds related to additions made under Section 14A read with Rule 8D.

Which sections of the Income-tax Act were involved?

Section 14A

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 15.5.2013 of Ld. CIT(A)-III, New Delhi pertaining to assessment year 2008-09 on the following grounds:- “1. Ld. CIT(A) erred in law and on the facts of the case in directing the AO to adjudicate the grounds of appeal relating to the addition made u/s. 14A read with rule 8D, without appreciating that it is the CIT(A) who is an adjudicating authority. 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. The CIT(A) has not given any findings on the merit or demerit of the case, especially the disallowance of Rs. 32,44,233/- made u/s. r.w.r. 8D in the order giving effect to the CIT(A)’s order dated 4.1.2012.

2. The appellant craves, leave or reserving the right to amend modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this 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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