2018 (8) TMI 1813 - AT - Income Tax

Low tax effect - maintainability of appeal - monetary limit - Reopening of assessment - addition to the extent of 6% of the bogus purchases - HELD THAT - Issue is covered by the order of the Tribunal in assessee s own case for the A.Y.2010-11 vide order dated 07/11/2017 2017 (11) TMI 1825 - ITAT MUMBAI . Moreover, the tax effect in this appeal is not exceeding ₹ 20 lakhs. Under the power vested by sec. 268A(1) of the I T. Act, CBDT has recently issued Circular No. 3/2018 dated 11.07.2018 instructing the authorities below that departmental appeal should not be filed before ITAT where the demand/tax effect does not exceed ₹ 20 lakhs. Subject to some exceptions, it is further directed by CBDT that all the departmental appeals pending before ITAT where the demand/tax effect is less than 20 lakhs should be either withdrawn or not pressed by the Departmental representative. The present appeal is not covered by any exceptions mentioned in the said CBDT circular. Since the tax demand in dispute in this departmental appeal does not exceed the limit of ₹ 20 lakhs as set out by CBDT, such appeal is not maintainable in view of fore goings. Accordingly the appeal of the Department is dismissed as not pressed/withdrawn and hence infructuous.

Summary

Issues:
- Appeal filed by Revenue against CIT(A)-20, Mumbai order for A.Y.2009-10 under IT Act.
- Tax effect below 20 lakhs as per CBDT Circular No. 3/2018.
- Tribunal's decision in assessee's case for A.Y.2010-11 regarding addition to bogus purchases.
- Applicability of CBDT Circular No. 3/2018 on the present appeal.
- Dismissal of Revenue's appeal due to tax effect not exceeding 20 lakhs.

Analysis:
The judgment by the Appellate Tribunal ITAT MUMBAI involved an appeal by the Revenue against the order of CIT(A)-20, Mumbai for the assessment year 2009-10 under the Income Tax Act. The learned AR representing the appellant pointed out that the tax effect in the appeal was below 20 lakhs, citing CBDT Circular No. 3/2018 dated 11.07.2018, which recommends dismissing such appeals. The AR also referred to a previous decision by the Tribunal in the assessee's case for A.Y.2010-11, where an addition to bogus purchases was upheld.

Upon reviewing the orders of the lower authorities, the Tribunal noted that the issue in the present appeal was already covered by its earlier decision in the assessee's case for A.Y.2010-11. Additionally, the tax effect in the current appeal did not exceed 20 lakhs. The Tribunal highlighted the power vested by sec. 268A(1) of the IT Act, emphasizing the CBDT Circular No. 3/2018 instructing that departmental appeals with a tax effect below 20 lakhs should not be pursued before the ITAT.

The CBDT circular further directed that unless there are exceptions, all departmental appeals pending before ITAT with a tax effect below 20 lakhs should be withdrawn or not pressed by the Departmental representative. The Tribunal found that the present appeal did not fall under any exceptions mentioned in the circular and, as the tax demand did not exceed 20 lakhs, the appeal was deemed not maintainable. Consequently, the Tribunal dismissed the appeal of the Revenue as not pressed or withdrawn, rendering it infructuous. The final decision was the dismissal of the Revenue's appeal due to the tax effect not exceeding the specified limit of 20 lakhs as per the CBDT Circular.

In conclusion, the judgment emphasized the application of the CBDT Circular No. 3/2018 regarding the tax effect threshold for departmental appeals, leading to the dismissal of the Revenue's appeal based on the prescribed limit and previous Tribunal decisions in the assessee's case.