2015 (1) TMI 93 - AT - Income Tax

Low tax effect - maintainability of revenue appeal - addition u/s 68 - Held that - Tribunal in the case of Deputy Commr.Of Income Tax vs. Sushila Saraogi (2014 (11) TMI 294 ITAT Kolkata) after considering the precedents on the subject held instruction No. 5/14 issued by the CBDT on 10.7.2014 is applicable to the pending appeals. The Tribunal followed the dictum laid down the judgments of the various High Courts including the two judgments of the Hon ble Jurisdictional High Court in the case of CIT vs. M/s. P.S. Jain & Co. in 2010 (8) TMI 702 - Delhi High Court and in the case of Commissioner of Income Tax vs. Delhi Race Club Ltd. 2011 (3) TMI 1488 - High Court of Delhi . In view of the order of the Tribunal in the case of Deputy Commissioner of Income Tax vs. Sushila Saraogi which have elaborately considered the identical issue, we hold that instruction No. 5/2014 issued by the CBDT on 10.7.2014 is applicable to the pending appeals. In the instant case, the tax effect being below ₹ 4 lacs, without going into the issue on merit, we dismiss the appeal of the revenue in liminee. It is to be mentioned that Ld. DR was unable to point out any exceptional circumstances /situation (mentioned in board instruction No. 5 / 2014) for filing an appeal despite the monetary limit being below the prescribed limit. - Decided against Revenue.

Summary

Issues:
1. Challenge to deletion of addition under section 68 of the Income Tax Act.
2. Validity of reopening of assessment by issuance of notice under section 148 of the Act.

Analysis:
1. The appeal by the revenue and the cross objection by the assessee arose from the CIT(A) order dated 16.4.2010 for the assessment year 2002-03. The revenue challenged the deletion of an addition of Rs. 13,79,700 made by the AO under section 68 of the Income Tax Act. On the other hand, the assessee's cross objection raised concerns about the validity of the reopening of assessment through a notice under section 148 of the Act.

2. The counsel for the assessee pointed out that the tax effect in the revenue's appeal was below the prescribed limit for filing an appeal before the ITAT, which was Rs. 4 lakhs. Referring to instruction No. 5/2014, which revised the monetary limits for filing appeals, the counsel relied on a Kolkata Tribunal Bench order in the case of DCIT vs. Sushila Saraogi. The Tribunal, after hearing both sides, considered the instruction issued by the CBDT on 10.7.2014 applicable to pending appeals. Citing judgments of various High Courts and the Tribunal's order in the case of Deputy Commissioner of Income Tax vs. Sushila Saraogi, it was held that the instruction was applicable. As the tax effect was below Rs. 4 lakhs, the appeal of the revenue was dismissed without delving into the merits. The lack of exceptional circumstances for filing an appeal despite the monetary limit being below the prescribed limit was noted.

3. As the revenue's appeal was dismissed, the assessee's cross objection was not taken up for adjudication. Consequently, both the appeal of the revenue and the cross objection of the assessee were dismissed. The decision was pronounced in the Open Court on 13th November, 2014.