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2020 (12) TMI 330 - AT - Income TaxMaintainability of appeal - low tax effect - case was reopened u/s 148 basis information received from Investigation Wing, Mumbai and therefore, the present appeal has been preferred by the Revenue - HELD THAT - We note that the tax effect in this appeal is not exceeding the monetary limit as revised by the CBDT vide Circular dated 08.08.2019 for the purpose of filing of appeal by the department before the Income Tax Appellate Tribunal from ₹ 20,00,000/- to ₹ 50,00,000/-. The exception 10(e) which has been referred by the ld DR relates to cases where addition is 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). 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
Issues:
1. Appeal against order dated 14.08.2019 of ld. CIT(A)-1, Jaipur for assessment year 2009-10. 2. Calculation of tax effect not exceeding the revised monetary limit for filing appeals before ITAT. 3. Exception under clause 10(e) of Circular no. 03 of 2018 for reopening cases based on information from Investigation Wing. Issue 1: Appeal against CIT(A) Order The appeal before the ITAT was directed against the order dated 14.08.2019 of ld. CIT(A)-1, Jaipur for the assessment year 2009-10. The tax effect calculated by the AO in relation to the relief granted by the CIT(A) was challenged in the present appeal. Issue 2: Calculation of Tax Effect The ITAT noted that the tax effect in the appeal did not exceed the revised monetary limit set by the CBDT for filing appeals before the ITAT. The CBDT Circular No. 17 of 2019 dated 08.08.2019 increased the monetary limit from ?20,00,000 to ?50,00,000 for filing appeals before the ITAT. As the tax effect in this case was below the revised limit, the appeal was deemed not maintainable. Issue 3: Exception under Circular no. 03 of 2018 The Department argued that the case fell under the exception outlined in clause 10(e) of Circular no. 03 of 2018, as the case was reopened under section 148 based on information from the Investigation Wing. However, the ITAT clarified that the Investigation Wing of the Income Tax Department cannot be considered an external law enforcement agency as specified in the exception. Therefore, the case did not qualify for an exception, and the appeal was dismissed on account of low tax effect, as per the CBDT circular. In conclusion, the ITAT dismissed the appeal filed by the Department due to the tax effect not exceeding the revised monetary limit for filing appeals before the ITAT. The case did not fall under any exceptions specified in the Circular, and the Investigation Wing was not considered an external law enforcement agency as per the relevant clause. The decision was based on the binding guidelines of the CBDT circular, resulting in the dismissal of the department's appeal.
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