What did the Tribunal hold?

The Tribunal held that the departmental appeal was not maintainable as the tax effect was below the revised monetary limit of Rs. 4 lakhs stipulated by CBDT Instruction No. 5/2014.

The Department filed an appeal before the ITAT against an order of the CIT(A) for AY 2008-09. The assessee contended that the tax effect involved in the appeal was below Rs. 4 lakhs.

What were the issues?

The primary issue was the maintainability of the departmental appeal before the ITAT based on the tax effect and the prevailing CBDT instructions.

ACIT vs M/S. Victory Dwellings Pvt. Ltd… | ITAT Delhi 2015

Income Tax Appellate Tribunal, DELHI BENCH “SMC-I” NEW DELHI

For Appellant: Shri Vijay Agarwal CA

For Respondent: Shri V.K. Khanna Addl. CIT (DR), Shri Vijay Agarwal CA

Hearing: 31/08/2015

Asstt. Yrs: 2008-09 ACIT, Central Circle-9, Vs. Victory Dwellings Pvt. Ltd., New Delhi. 208, Gupta Tower, Azadpur Commercial Complex, Azadpur, New Delhi. PAN: AACCV 2862 N ( Appellant ) (Respondent) Department by : Shri V.K. Khanna Addl. CIT (DR) Assessee by : Shri Vijay Agarwal CA Date of hearing : 31/08/2015. Date of order : 05/11/2015. O R D E R PER S.V. MEHROTRA, A.M..: This appeal, by the department , has been preferred against the order dated 20-08-2014, passed by the CIT(A)-XXXII, New Delhi in appeal no. 256/13-14, relating to A.Y. 2008-09.

Ld. counsel for the assessee at the outset submitted that the tax effect involved in the present departmental appeal is 2,37,930/- i.e. below Rs. 4 lacs and, therefore, the appeal filed by the revenue is not maintainable in view of recent CBDT instruction, which is binding on the department.

2 ITA 6229/Del/2014 Victory Dwelling Pvt. Ltd. 3. The learned DR could not controvert the aforementioned facts. He, however, submitted that the department has not given up its stand.

I have heard rival submissions of the parties and perused the entire material on record. As per recent CBDT Instruction no. 5/2014 [F No. 279/Misc. 142/2007- ITJ(Pt)], dated 10-7-2014, the monetary limit for filing appeal by the department before the ITAT has been revised to Rs. 4 lacs. Thus, the departmental appeal, involving tax effect below Rs. 4 lacs, is not maintainable before the ITAT. Para 5 of the CBDT Instruction stipulates as under:

“5. The Assessing Officer shall calculate the tax effect separately for every assessment year in respect of the disputed issues in the case of every assessee. If, in the case of an assessee, the disputed issues arise in more than one assessment year, appeal, can be filed in respect of such assessment year or years in which the tax effect in respect of the disputed issues exceeds the monetary limit specified in para 3. No appeal shall be filed in respect of an assessment year or years in which the tax effect is less than the monetary limit specified in para 3. In other words, henceforth, appeals can be filed only with reference to the tax effect in the relevant assessment year. However, in case of a composite order of any High Court or appellate authority, which involves more than one assessment year and common issues in more than one assessment year, appeal shall be filed in respect of all such assessment years even if the 'tax effect' is less than the prescribed monetary limits in any of the year(s), if it is decided to file appeal in respect of the year(s) in which 'tax effect' exceeds the monetary limit prescribed. In case where a composite order / judgment involves more than one assessee, each assessee shall be dealt with separately.”

3 ITA 6229/Del/2014 Victory Dwelling Pvt. Ltd.

Undisputedly, the tax effect involved in the present appeal is below Rs. 4 lakhs. Therefore, in view of the revised instruction of the CBDT, referred to above, the departmental appeal is not maintainable.

In the result, departmental appeal is dismissed. Order pronounced in open court on 05/11/2015.

ACIT, NEW DELHI vs. M/S. VICTORY DWELLINGS PVT. LTD., NEW DELHI

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