DCIT, CIRCLE - 19(1), DELHI vs. PURE DEPARTMENTAL STORE PVT. LTD., DELHI

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ITA 4211/DEL/2024Status: DisposedITAT Delhi26 September 2025AY 2017-183 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 condoned the 13-day delay in filing the Revenue's appeal, finding reasonable cause due to the AO being engaged in time-barring matters. Regarding the maintainability of the appeal, the Tribunal noted that the Hon'ble Madras High Court in SMILE Microfinance Ltd. v. ACIT (WP(MD) No. 2078 of 2020 & 1742 of 2020 dated 19.11.2024) had settled the issue that Section 115BBE applies only to transactions on or after 01.04.2017. Since the assessment year in question is 2017-18, and the AO invoked section 115BBE, the Tribunal concluded that the consequential tax effect computation was affected. Therefore, the Revenue's appeal was found to be hit by CBDT Circular No. 09 of 2024 on account of low tax effect, as per normal provisions. The Tribunal dismissed the Revenue's appeal, granting liberty to the Revenue to move an application if the case falls under any exception.

What were the facts?

The Revenue, represented by the DCIT, Circle-19(1), Delhi, filed an appeal before the Income Tax Appellate Tribunal (ITAT), Delhi Bench, against the order dated 01.07.2024 passed by the NFAC, Delhi. This order arose from an assessment order dated 29.12.2019 passed under section 143(3) of the Income Tax Act, 1961, for Assessment Year 2017-18. The Revenue's appeal was filed with a delay of 13 days. The Assessing Officer (AO) had made additions of INR 83,59,950/- under section 69C and INR 6,56,000/- under section 68, invoking section 115BBE and charging tax at 60%. The total tax effect of the additions challenged was INR 69,64,821/-.

What were the issues?

1. Whether the delay of 13 days in filing the Revenue's appeal is condonable, considering the reasons provided by the AO. (Mixed question of law and fact) 2. Whether the Revenue's appeal is maintainable on account of low tax effect, in light of CBDT Circular No. 09 of 2024, given that section 115BBE applies to transactions on or after 01.04.2017. (Question of law) Assessee's contention: The assessee objected to the condonation of delay. Revenue's contention: The Revenue requested condonation of delay, citing engagement in time-barring matters and re-opening of cases under section 148, stating the delay was only 13 days.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 250,Section 68,Section 69C,Section 115BBE,Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI “A” BENCH: NEW DELHI

Before: SHRI YOGESH KUMAR U.S & SHRI MANISH AGARWAL

For Appellant: Shri Ved Jain, Adv. &, Ms. Uma Upadhyay, CA
For Respondent: Shri Ajay Kumar Arora, Sr.DR, Shri Ved Jain, Adv. &, Ms. Uma Upadhyay, CA
Hearing: 07.07.2025Pronounced: 26.09.2025
1.

This appeal is filed by the Revenue against the order dated 01.07.2024 by Ld. Commissioner of Income Tax (A), National Faceless Appeal Centre (“NFAC”), Delhi [“Ld.CIT(A)”] in Appeal No. CIT(A), Delhi-4/10701/2019-20 passed u/s 250 of the Income Tax Act, 1961 [“the Act”] arising from the assessment order dated 29.12.2019 passed u/s 143(3) of the Act pertaining to Assessment Year 2017-18.

2.

This appeal is filed delayed by 13 days and an application for condonation of delay was filed wherein it is stated by the AO that due to time barring penalty and re-opening of cases u/s 148, the appeal could not be filed within time and delay was of only 13 days.

It is thus requested that delay be condoned and appeal be admitted for adjudication.

3.

On the other hand, Ld.AR for the assessee objected to the condonation of delay.

4.

Heard both the parties. Considering the facts stated by AO being engaged in time barring matters, we find that there is reasonable cause in filing the appeal delayed. Therefore, the delay is condoned and appeal is admitted for adjudication.

5.

Heard both parties and perused the material available on record. In the instant appeal filed by the Revenue is having total tax effect of INR 69,64,821/- on the additions challenged before us of INR 90,15,950/-. The AO made addition of INR 83,59,950/- u/s 69C of the Act and further addition of INR 6,56,000/- was made u/s 68 and invoked the provision of section 115BBE of the Act and charged tax @ 60% on such additions. Accordingly tax effect was computed at INR 69,64,821/-.

6.

That being the case we sought to verify the total tax effect involved in the Revenue’s instant appeal. Ld. Sr. DR, submits that the ld. AO has computed the same at Rs. 69,64,821/-. However, we find no merit in the above computation, once Hon’ble Madras High Court in the case of SMILE Microfinance Ltd. v. ACIT in WP(MD) No. 2078 of 2020 & 1742 of 2020 dated 19.11.2024 (Mad.) has already settled the issue that Section 115BBE applies on transactions on or after 01.04.2017 only. We thus, conclude that going by the consequential tax effect computation the Revenue’s instant appeal is hit by the CBDT Circular No. 09 of 2024 dated 17.09.2024 on account of low tax effect, as per the normal provisions. Revenue’s instant appeal is dismissed. Revenue is at liberty to move application if the case is fallen under any exception.

7.

In the result, appeal of the Revenue is dismissed.

Order pronounced in the open Court on 26.09.2025.

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