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Income Tax Appellate Tribunal, DELHI BENCH: ‘G’ : NEW DELHI
Before: SHRI CHANDRA MOHAN GARGSHRI L.P. SAHU
PER CHANDRA MOHAN GARG, JUDICIAL MEMBER
This appeal filed by the Revenue is directed against the order of the CIT(A)-XXVI, New Delhi, dated 30/10/2009 for A.Y 2002-03.
We have heard the arguments of both the sides and carefully perused the relevant material placed on record before us.
The ld. DR supporting the action of the AO, drew our attention towards para 2 of the assessment order and submitted that the expenses claimed by the assessee on fuel and power was Rs. 36.99 lakhs and as per the figures mentioned at Sl. No. 112 at page 39 of part III of Auditor’s report, the allocation in respect of amount has been on fuel and power in the hands of the assessee was only 15.12 lakhs.
Therefore, the AO rightly held that the assessee has claimed excess amount of Rs. 21.87 lakhs under the head of power and fuel and income of the firm consequently has been shown less by an amount of Rs. 21.87 lakhs which was rightly disallowed and added to the taxable income of the assessee being excess expenses claimed under the head ‘fuel and power’. The ld. DR further drew our attention towards para 5.2 of the first appellate order and submitted that the ld. CIT(A) granted relief to the assessee without any basis and logical reasons.
Replying to the above, the ld. AR supporting the impugned order, submitted that the original assessment was done u/s 143(3) of the Income-tax Act, 1961 ['the Act' for short] and reasons recorded by the AO for initiation of proceedings u/s 147/148 of the Act was not logical and proper. The ld. AR vehemently contended that the reasons recorded by the AO for reopening assessment u/s 147 of the Act were based on incorrect facts. Hence the action of the AO for issuance of notice u/s 148 of the Act on the basis of suspicion was bad in law. The ld. AR further contended that there was neither escapement of income nor there was any evidence in this regard in respect of excess claim of fuel and power as per Special Audit Report in the case of Superior Crafts for A.Y 2002-03 which was used by the AO on the sole basis for initiation of action u/s 148 of the Act. Therefore, the same was rightly deleted by the ld. CIT(A).
On careful perusal of the submissions of both the rival representatives, at the very outset, from the operative part of the impugned order, we note that the ld. CIT(A) granted relief to the assessee by holding that there was neither escapement of income nor there was any evidence in this regard in respect of excess claim of fuel and power as per Special Audit Report in the case of Superior Crafts for A.Y 2002-03 which was used by the AO on the sole basis for initiation of action u/s 148 of the Act. In view of the above, it is amply clear that the ld. CIT(A) noted that the AO while recording reasons for initiation of proceedings u/s 147/148 of the Act mentioned that “as per figures mentioned at Sl. No. 1 and 2 on page 39 of part AAA of Auditor’s Report, the allocation in respect of amount has been of ‘fuel and power’ in the hands of M/s Supreme Exports [India] is Rs. 15.12 lakhs”. The ld. CIT(A) further noted that there was no such categorical finding made by the Special Auditor’s at page NO. 39 of part 3 AAA of Auditor’s Report, as mentioned above at the said page No. 39 Annexure AAA is placed in the Special Audit Report, which summarises the various expenses and their respective ratios that the turnover of the three sister concerns operating from the same premises. In this situation, the ld. CIT(A) was right in holding that the reasons recorded by the AO for reopening of assessment u/s 148 of the Act was based on incorrect facts. Hence the action of the AO for issuance of notice u/s 148 of the Act on the basis of such reasons is bad in law. The ld. CIT(A) was quite justified and correct in deleting the addition made by the AO holding the same being arbitrary, baseless and without any cogent evidence and we uphold the conclusion of the ld. CIT(A).
At this juncture, we may also point out that at the time of dictation, and passing of this order, we take cognizance of the CBDT Instruction No. 21 of 2015 dated 10.12.2015, by which the CBDT has revised the monetary limit to Rs. 10,00,000/- for filing the appeal before the Tribunal.
Further in para 10 of the Circular, it is provided that this Instruction would apply retrospectively and the pending appeals below the specified tax limit of Rs. 10 lakhs may be withdrawn/not pressed.
Keeping in view the CBDT Instruction No. 21 of 2015 dated 10.12.2015 and also the provisions of Section 268A of Income Tax Act, 1961, we are of the view that the Revenue’s appeal is not maintainable as the Instructions issued in the Circulars by CBDT are applicable for pending cases also. In view of the above, we are unable to see any valid reason to interfere with the impugned order and even in the light of 5 the subsequent Circular dated 10.12.2015 [supra] we dismiss the appeal filed by the Revenue as tax effect in this appeal is less than Rs. 10 lakhs.
In the result, the appeal of the Revenue stands dismissed.
The order is pronounced in the open court on 31 .12.2015.