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TMI Blog2018 (8) TMI 2014X X X X Extracts X X X X X X X X Extracts X X X X ..... e recorded for not filing the appeal by the Pr. CIT/CIT. We find that in the present case the ld. DR by statement of facts annexed with Form No. 36 pointed out that the CIT concerned examined the appeal carefully and suggested to file appeal even though the revenue effect is lower than the prescribed monetary limit. According to him, it was prompted by audit objection on the issue of excess claim of depreciation and the CIT- A erroneously deleted the same. This decision of the CIT-A has not been accepted by the revenue and as such preferred an appeal before this Tribunal by accepting the said revenue audit objection. The ld. AR brought to our notice during the course of arguments that the CIT-A deleted the addition made on account of excess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bjected to the above submissions of the ld. AR and contended that the addition made by the AO was prompted by audit objection in respect of excess claim of depreciation. The dept. of Revenue has not accepted the decision of the CIT-A in deleting the impugned addition as the issue involved therein is a claim of higher rate of depreciation. He also submitted that the AO made this addition in pursuance of order passed under section 263 of the Act and argued that the issue raised in the appeal though it is below the tax effect, but it is covered by exception (c) to para 8 provided in CBDT Circular No. 21/2015 dt. 10-12-2015. Basing on which, the CIT suggested to file appeal before this Tribunal as the issue involved as arisen due to audit objec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to para 3. 2 of the said order and argued that the Co-ordinate Bench in the case of Movva Lakshmi supra considered the CBDT Circular No. 21/2015 dt. 10-12-2015 and subsequent Circulars 5/2017 dt. 23-01- 2017 and held that the revenue shall not file the appeal(s) as a matter of routine merely because there is revenue audit objection. 6. By referring to present case, ld. AR submits that the CIT-A deleted the impugned addition made on account of excess depreciation by placing reliance on the decision of Hon ble High Court of Bombay in the case of S. C. Thakur Bros. reported in 322 ITR 263 and CBDT Circular No. 609 dt. 29-07-1991. The appellant revenue without examining the issue on merits mechanically filed this present appeal, which is con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ues should be contested on merits notwithstanding that the tax effect entailed is less than the monetary limits specified in para 3 above or there is no tax effect : ( a) Where the Constitutional validity of the provisions of an Act or Rule are under challenge, or ( b) Where Board s order, Notification, Instruction or Circular has been held to be illegal or ultra vires, or ( c) Where Revenue Audit objection in the case has been accepted by the Department, or ( d) Where the addition relates to undisclosed foreign assets/bank accounts. 9. A reading of aforementioned para-8 suggests that adverse judgements relating to Constitutional validity of the provision of an Act or Rule, Board s circular, notification, instruction, revenue audit objectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can be filed by the revenue only on merits, even on issues contemplated (a) to (d) mentioned in para-8 of Circular 21/2015. Therefore, it is clear, an appeal should not be filed merely on the presumption that the additions involving the exceptions in para-8 of Circular 21/2015, but, only on merits. 12. Further, to examine Instruction No. 7/2017 dt. 21-7-2017, as relied on by the ld. AR, para 5 reads as under:- Second appeal in cases involving Revenue Audit Objection: The adverse order of first appellate authority in cases involving Revenue Audit Objections should be carefully scrutinized by the PCIT/CIT, and appeal should not be preferred, if the order is justified either in law or on facts. Reasons for not filing appeal may be recorded by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mission that the issue arose on audit objection. 14. Further, the order of the Co-ordinate Bench in the case of Movva Lakshmi supra vide order dt. 06-12-2017 dismissed the appeal of revenue as unadmitted. On perusal of said order, the AO has been directed to file an appeal against the order of CIT-A on similar set of facts, which are identical to present appeal. Relevant portion of which is reproduced herein below:- 3. 1 On careful perusal of the same it indicates that the ClTs have to record their decision issue-wise and also notice tax effect and forward relevant authorisation letter and grounds of appeal to the concerned. 3. 2. Since the grounds have to be specified by the Commissioner, if the tax effect is low, reasons as to why an appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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