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2024 (7) TMI 844 - AT - Income TaxMaintainability of appeal on low tax effect before ITAT - Entitlement of Co-operative society to claim deduction u/s 80P(2)(d) on interest income - HELD THAT - AO has not disputed the fact that the tax effect for these two appeals are only Rs. 3,23,712/- and Rs. 3,13,567/- for the Assessment Year 2014-15 and 2015-16 respectively. Thus the tax effect in these two appeals are below the monetary limit prescribed in the Circular No.3/2018 as well as Circular No.17/2019 which is Rs. 50 lakh for filing appeal before the Tribunal. A.O in the report dated 02.07.2024 has taken a stand that though the tax effect is below the prescribed monetary limit provided in the above said circulars of CBDT but these cases fall under exception provided in para no.10(c) of Circular No.3/2018 being case of audit objections. As per CBDT latest circular No.5/2024 dated 15.03.2024 there is no exception to the monetary limit regarding any audit objection. It is settled position that the CBDT circulars prescribing monetary limits for filing the appeals by the Department before the Tribunal/Hon ble High Court/Hon ble Supreme Court are also applicable on the pending appeals on the date of circular. Accordingly in view of the judgment of Hon ble Bombay High Court in case of CIT V/s Madhukar K Inamdar HUF 2009 (7) TMI 145 - BOMBAY HIGH COURT the CBDT Circular No.5/2024 is applicable in the present appeals filed on 27.2.2024 and consequently due to low tax effect the appeals of the revenue are not maintainable and liable to be dismissed. Since the appeals of the department are dismissed due to low tax effect therefore, we do not proposed to go into the merits of the issue of allowability of deduction u/s 80P(2)(a)(i) of the Act. Appeals of the revenue are dismissed.
Issues:
- Appeal against Commissioner of Income Tax (Appeals) orders for Assessment Years 2014-15 and 2015-16. - Entitlement of Co-operative society to claim deduction u/s 80P(2)(d) on interest income. - Validity of reopening assessment due to lack of mention of issue in original assessment order. - Maintainability of appeals by revenue due to low tax effect. - Applicability of CBDT circulars on monetary limits for filing appeals. - Impact of latest Circular No.5/2024 superseding earlier circulars. - Interpretation of CBDT circulars by assessing officer and arguments by both parties. - Precedent set by Hon'ble Supreme Court judgment and CBDT circular No.18/2015. - Consideration of exceptions to monetary limits for filing appeals as per latest Circular No.5/2024. - Application of CBDT Circular No.5/2024 in deciding the maintainability of appeals by revenue. Analysis: The Appellate Tribunal ITAT INDORE heard appeals by the revenue against the Commissioner of Income Tax (Appeals) orders for Assessment Years 2014-15 and 2015-16. The main issue was the entitlement of a Co-operative society to claim deduction u/s 80P(2)(d) on interest income from FDR/Deposits. The revenue raised grounds related to the validity of reopening assessments due to the absence of mention of the issue in the original assessment orders. The Assessing Officer reported a low tax effect for both appeals, below the prescribed monetary limit, but argued for an exception due to audit objections. The parties debated the maintainability of the appeals based on CBDT circulars and the impact of Circular No.5/2024 superseding earlier circulars. The assessing officer contended that the cases fell under an exception in Circular No.3/2018 due to audit objections, while the appellant argued that the latest Circular No.5/2024 did not provide an exception for audit objections. The appellant also referenced a CBDT circular and a Supreme Court judgment supporting the Co-operative society's entitlement to the deduction. The Tribunal considered the latest circular's exceptions to monetary limits for filing appeals, emphasizing cases where tax effect is not quantifiable or not involved, among others. The Tribunal highlighted the applicability of Circular No.5/2024 in deciding the maintainability of the appeals by the revenue. Citing a judgment by the Hon'ble Bombay High Court, the Tribunal concluded that due to the low tax effect, the appeals were not maintainable and ordered their dismissal. As a result, the Tribunal did not delve into the merits of the deduction claim under section 80P(2)(a)(i) of the Act. The appeals of the revenue were ultimately dismissed based on the principles outlined in the CBDT circulars and relevant judicial precedents.
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