2015 (10) TMI 1398 - AT - Income Tax

Maintainability of appeal - Unexplained cash credit - CIT(A) deleted the addition - Held that - Instructions issued in the circulars issued by the Central Board of Direct Taxes are applicable to pending cases also. Therefore we are of the considered view that Instruction No. 5 of 2014, dated July 10, 2014 issued by the Central Board of Direct Taxes are applicable to the pending cases also and in the said instructions, the monetary tax limit for filing appeals before the Income-tax Appellate Tribunal is ₹ 4 lakhs. Accordingly, without going into merit of the case, we dismiss this appeal of the Department on account of tax effect being less than ₹ 4 lakhs.

Summary

Issues involved:
1. Appeal against deletion of addition of unexplained cash credit in the books of account.
2. Applicability of section 268A of the Income-tax Act, 1961 on filing appeals.
3. Monetary limit for filing appeals before the Income-tax Appellate Tribunal.
4. Applicability of Central Board of Direct Taxes instructions on pending cases.
5. Dismissal of appeal and cross-objection.

Analysis:

1. The appeal in question challenged the deletion of an addition of Rs. 11,50,000 made by the Assessing Officer on account of unexplained cash credit in the books of account. The counsel for the assessee argued that the tax effect in the appeal was less than Rs. 4,00,000, which falls below the monetary limit set by section 268A of the Income-tax Act, 1961. The Department, while supporting the Assessing Officer's order, did not contest the assertion that the tax effect was below the prescribed limit.

2. Section 268A of the Income-tax Act, 1961 empowers the Board to issue orders fixing monetary limits for filing appeals by Income-tax authorities. The provision prohibits an assessee from contending that the authority has acquiesced in a decision by not filing an appeal. The Central Board of Direct Taxes, through Instruction No. 5 of 2014, revised the monetary limit to Rs. 4,00,000 for filing appeals before the Tribunal. The Tribunal held that the Department should not have filed the appeal due to the tax effect being below the prescribed limit.

3. Citing decisions of the Punjab and Haryana High Court and the Delhi High Court, the Tribunal emphasized that circulars issued by the Central Board of Direct Taxes, including the revised monetary limit, are applicable to pending cases. Relying on this legal precedent, the Tribunal dismissed the Department's appeal without delving into the merits of the case due to the tax effect falling below the prescribed limit.

4. The cross-objection filed by the assessee, seeking no specific relief, was rendered infructuous by the dismissal of the Department's appeal. Consequently, the Tribunal dismissed the cross-objection as well. The judgment, delivered on January 1, 2015, concluded with the dismissal of both the appeal and the cross-objection.

This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the Tribunal's decision based on the relevant legal provisions and precedents.