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TMI Blog2019 (8) TMI 1402X X X X Extracts X X X X X X X X Extracts X X X X ..... rcular number 3/2018 dated 11.07.2018 and modification dated 20.08.2018 based on cogent reasons/evidences that these appeals are covered under exceptions carved out in aforesaid CBDT circular , the Revenue is hereby granted liberty to file miscellaneous application(s) praying for recall of these orders in accordance with law - I.T.A. No.818-820/Mum/2017 - - - Dated:- 8-7-2019 - SHRI C. N. PRASAD, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER Revenue by: Shri Vivek Anand Ojha,DR Assessee by: Shri. Sanjiv M. Shah And Mr Rajesh Chamaria ORDER PER BENCH: These three appeal(s) filed by the Revenue in ITA No. 818-820/Mum/2017 are disposed off because the tax effect in these three appeals is less than ₹ 20 lacs ( in each of the appeals separately, tax effect is not exceeding ₹ 20 lacs ) as per CBDT Circular No. 3/2018, F. No. 279/Misc.142/2007-ITJ (Pt) dated 11th July, 2018 issued by Central Board of Direct Taxes, Department of Revenue, Ministry of Finance, Government of India, which stood later modified vide F.No.279/Misc 142/2007-ITJ-(Pt) dated 20.08.2018. 2. The learned counsel for the assessee at the outset pleaded that these app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal covered by CBDT circular dated 11.07.2018.The learned DR although agreed that tax effect in these three appeals are less than ₹ 20 lacs but owing to the fact that information was received by AO from Directorate of Income-Tax(Investigation) , claim has been set up by Revenue that these appeals should not be dismissed owing to low tax effect because these appeals are covered by exceptions given under aforesaid circular dated 11.07.2018 as modified on 20.07.2018, vide para 10(e) because as per learned DR , information received from Directorate of Income-tax(Inv.), Mumbai is all together an information received from external sources in the nature of law enforcement agencies so far as assessment unit of Income-tax Department is concerned. . It is important at this stage to reproduce para 10(e) of aforesaid circular dated 11.07.2018 as modified on 20.08.2018., as under: 10 *** *** (e) 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 2.3 It is also pertinent to reproduce hereunder , the CBDT circular dated 11.07.2018 and also i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest is the issue under dispute, the amount of interest shall be the tax effect. In cases where returned loss is reduced or assessed as income, the tax effect would include notional tax on disputed additions. In case of penalty orders, the tax effect will mean quantum of penalty deleted or reduced in the order to be appealed against. 5. The Assessing Officer shall calculate the tax effect separately for every assessment year in respect of the disputed issues in the case of every assessee. If, in the case of an assessee, the disputed issues arise in more than one assessment year, appeal can be filed in respect of such assessment year or years in which the tax effect in respect of the disputed issues exceeds the monetary limit specified in para 3. No appeal shall be filed in respect of an assessment year or years in which the tax effect is less than the monetary limit specified in para 3. In other words, henceforth, appeals can be filed only with reference to the tax effect in the relevant assessment year. However, in case of a composite order of any High Court or appellate authority, which involves more than one assessment year and common issues in more than one assessment y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r assessment year, if the tax effect exceeds the specified monetary limits. 8. In the past, a number of instances have come to the notice of the Board, whereby an assessee has claimed relief from the Tribunal or the Court only on the ground that the Department has implicitly accepted the decision of the Tribunal or Court in the case of the assessee for any other assessment year or in the case of any other assessee for the same or any other assessment year, by not filing an appeal on the same disputed issues. The Departmental representatives/counsels must make every effort to bring to the notice of the Tribunal or the Court that the appeal in such cases was not filed or not admitted only for the reason of the tax effect being less than the specified monetary limit and, therefore, no inference should be drawn that the decisions rendered therein were acceptable to the Department. Accordingly, they should impress upon the Tribunal or the Court that such cases do not have any precedent value and also bring to the notice of the Tribunal/ Court the provisions of sub section (4) of section 268A of the Income-tax Act, 1961 which read as under : (4) The Appellate Tribunal or Court, h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eals/cross objections/references to be filed henceforth in SC/HCs/Tribunal and it shall also apply retrospectively to pending SLPs/appeals/cross objections/references. Pending appeals below the specified tax limits in para 3 above may be withdrawn/ not pressed. 14. The above may be brought to the notice of all concerned. 15. This issues under Section 268A of the Income-tax Act 1961. 16. Hindi version will follow. Sd/- (Neetika Bansal) Director (ITJ), CBDT, New Delhi. Copy to: 1. The Chairman, Members and all other officers in CBDT of the rank of Under Secretary and above. 2. All Pr. Chief Commissioners of Income Tax and All Directors General of Income Tax with a request to bring to the attention of all officers. 3. ADG (PR, PP OL)t Mayur Bhawan, New Delhi for printing in the quarterly Tax Bulletin and for circulation as per usual mailing list. 4. The Comptroller and Auditor General of India. 5. ADG (Vigilance), Mayur Bhawan, New Delhi. 6. The Joint Secretary Legal Advisor, Ministry of Law Justice, New Delhi. 7. All Directorates of Income-tax, New Delhi and DGIT (NADT), Nagpur. 8. ITCC (3 copies). 9. The ADG (System)-4, for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... served that undisputedly tax effect in all these three appeals filed by Revenue is not exceeding ₹ 20 lacs(computed in each of the appeal separately ) . The CBDT came out with circular on 11.07.2018 wherein it is stipulated that wherein tax effect does not exceed monetary limit of ₹ 20 lacs , the appeals shall not be filed henceforth by Revenue with Income-Tax Appellate Tribunal and further all pending appeals filed by Revenue with ITAT shall be withdrawn or not pressed. The aforesaid CBDT circular stood modified on 20.08.2018 wherein exceptions were enlarged. Both CBDT circular dated 11.07.2018 as well its modification dated 20.08.2018 are reproduced in preceding para s of this order. The Revenue main bone of contention in these three appeals is that these three appeals are covered by exceptions as carved out in para 10(e) vide modification dated 20.08.2018 to CBDT Circular dated 11.07.2018 , which provides that when additions are 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) , then these appeals shall not be withdrawn owing to low tax effect. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Department and various departments/ wings which works under its aegis. Directorate of Income-tax (Investigation) is law enforcement agency under the Ministry of Finance and controlling authority is Investigation division of CBDT. Thus, Directorate of Income-tax(Investigation) an internal agency/wing of Income-tax Department which works under the aegis of its controlling authority CBDT and can not be considered to be an external source as is referred to vide communication dated 20.08.2018 in para 10(e). When CBDT is referring to an external sources , it is certainly referring to sources which are not internal sources within Income-tax Department and various wings functioning within its aegis. Our view is further fortified by careful perusal of illustrations referred to in para 10(e) of modification dated 20.08.2018 namely CBI/ED/DRI/SFIO/Directorate General of GST Intelligence , none of these agencies listed in para 10(e) works under the aegis of Income-tax Department and are in-fact external sources so far as Income-tax Department is concerned . Thus, this plea of learned DR cannot be accepted that Directorate of Income-tax(Investigation) is an external source for the pur ..... 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