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2020 (5) TMI 184 - AT - Income TaxMaintainability of appeal - low tax effect - Reopening of assessment - addition based on information received from external sources in the nature of law enforcement agencies such as CBI/ ED/ DRI/ SFIO/ Directorate General of GST Intelligence (DGGI) - HELD THAT - Both administratively and functionally, there cannot be any dispute that the Investigation Wing of Income Tax Department is part of Income Tax Department and is therefore clearly not an external law enforcement agency and that too, as specified in the aforesaid exception. Therefore, in the instant case, where the matter has been reopened based on information received from Investigation Wing and the assessment has been completed by the Assessing officer where the matter under appeal has tax effect less than the prescribed limit, it will continue to be governed by low tax effect circular issued by the CBDT which is binding on the Revenue. Present appeal filed by the Department is dismissed on account of low tax effect given the matter not covered by any exceptions so specified.
Issues:
1. Appeal by the Department against the order of ld. CIT(A)-I, Jaipur for the assessment year 2009-10. 2. Calculation of tax effect in the appeal not exceeding the revised monetary limit set by CBDT. 3. Exception clause 10(e) of Circular no. 03 of 2018 allowing appeals to be filed despite low tax effect in certain cases. 4. Interpretation of exception 10(e) in relation to cases based on information from Investigation Wing. Analysis: 1. The appeal was filed by the Department against the order of ld. CIT(A)-I, Jaipur for the assessment year 2009-10. The tax effect calculated by the AO in respect of the relief granted by the ld. CIT (Appeals) was challenged in the appeal, amounting to ?1,43,924. 2. The ITAT Jaipur noted that the tax effect in the appeal did not exceed the revised monetary limit set by the CBDT. The CBDT circular dated 08.08.2019 increased the monetary limit for filing appeals before the Income Tax Appellate Tribunal from ?20,00,000 to ?50,00,000. Therefore, the appeal of the Department was deemed not maintainable due to the low tax effect. 3. The Department argued that the case fell under exception clause 10(e) of Circular no. 03 of 2018, as it was reopened under section 148 based on information from the Investigation Wing. Exception clause 10(e) allows appeals to be filed despite low tax effect in cases based on information from external law enforcement agencies. 4. The ITAT Jaipur analyzed the interpretation of exception 10(e) in relation to cases based on information received from law enforcement agencies like CBI, ED, DRI, SFIO, or DGGI. It was clarified that the Investigation Wing of the Income Tax Department is not considered an external law enforcement agency. Therefore, in cases where the matter was reopened based on information from the Investigation Wing and the tax effect was below the prescribed limit, the appeal would be governed by the low tax effect circular issued by the CBDT. In conclusion, the ITAT Jaipur dismissed the Department's appeal due to the low tax effect and the matter not falling under any specified exceptions. The decision was based on the interpretation of the CBDT circular and the specific circumstances of the case.
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