2016 (7) TMI 1446 - AT - Income Tax

Maintainability of appeal - monetary limit for filing the appeal by the department before ITAT - Held that - CBDT vide Circular No.21/2015 dated 10th December, 2015 has revised the monetary limit to ₹ 10 Lacs for filing the appeal by the department before Income Tax Appellate Tribunal. Para 3 of the aforesaid Circular has been made applicable vide para 10 retrospectively. Considering the settled legal precedent that the Board s instructions or directions issued to the Income Tax Authorities u/s 268A of the Income Tax Act, 1961 are binding on the authorities, the departmental appeal considering the material available on record is dismissed.

Summary

Issues:
- Correctness of the order dated 09.05.2014 of CIT(A)-XXXI, New Delhi for the 2005-06 assessment year.
- Deletion of addition of ?25,63,024 made by the Assessing Officer.
- Tax effect involved in the appeal.

Analysis:
1. The appeal was filed by the Revenue challenging the order of CIT(A)-XXXI, New Delhi for the 2005-06 assessment year. The grounds of appeal included disputing the correctness of the CIT(A)'s order and challenging the deletion of an addition of ?25,63,024 made by the Assessing Officer based on the GP rate discrepancy.

2. The Appellant argued that the tax effect involved in the appeal was less than ?10 lakhs, making the departmental appeal not maintainable as per CBDT Circular No.21/2015. The tax effect was calculated to be ?9,37,873, falling below the threshold for appeal maintenance.

3. The Revenue requested adjournments citing unavailability of the CIT DR. Despite being given time, similar adjournment requests were made on the next date. The Ld. Sr. DR verified the tax effect calculation, and after considering the circumstances, the application for adjournment was rejected.

4. The Judicial Member referred to CBDT Circular No.21/2015, which revised the monetary limit for filing appeals before the Income Tax Appellate Tribunal to ?10 lakhs. The Circular was made applicable retrospectively, and based on legal precedent, the Board's instructions were deemed binding. Consequently, the departmental appeal was dismissed due to the tax effect falling below the prescribed limit.

5. Ultimately, the appeal of the Revenue was dismissed, and the order was pronounced on 12th July 2016. The decision was based on the application of the revised monetary limit set by the CBDT Circular, which governed the maintainability of the departmental appeal based on the tax effect involved.