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TMI Blog2024 (12) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... t : Shri Arvind Desai ORDER PER ASTHA CHANDRA, JM : The appeal filed by the Revenue and Cross Objection filed by the assessee arise out of order dated 20.12.2023 of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Center, Delhi [ CIT(A)/NFAC ] pertaining to Assessment Year ( AY ) 2016-17. 2. The Revenue has raised the following grounds of appeal:- 1. On facts and in circumstances of the case, the Ld. CIT-A erred in allowing the penalty of Rs. 48,64,586/- u/s 271E of the Income Tax Act, 1961, levied on account of the assessee had contravened the provision of section 269T by repaying of loan other than the account payee or demand draft. Therefore, assessee was liable to pay penalty under section 271E of IT Act 1961. 2. It is submitted that monetary limit of CBDT Circulars no. 17/2019 will not apply as penalty has been levied on observation of Audit Objection, which falls under exception 10(c) as laid down by the Board in Circular No. 3/2018 dated 11.07.2018 as amended by Board's letter dated 20.08.2019. 3. The appellant craves leave to add, alter, modify, delete amend any of the grounds with prior permission of the Hon'ble CIT, as per the circumstances o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 2,15,53,035/- by making addition of Rs. 52,83,945/- on account of income from house property and addition of Rs. 5,05,860/- on account of low household withdrawals, to the income returned by the assessee. The assessee carried the matter in appeal before the Ld. CIT(A) who vide his order dated 20.12.2023 confirmed the above additions made by the Ld. AO. 6. In the meanwhile, the assessee s case was selected for Revenue audit. The Audit party observed that the assessee had contravened the provisions of section 269T of the Income Tax Act, 1961 (the Act ) on account of repayment of loan other than account payee cheque or demand draft amounting to Rs. 46,65,980/- on 29.07.2019. The Audit objection was accepted by the Ld. AO who after analyzing the audit report submitted by the assessee levied penalty of Rs. 48,64,586/- u/s 271E of the Act on 12.03.2022 on account of violation of provisions of section 269T of the Act. 7. On appeal, the Ld. CIT(A) after considering the evidences / documents available on record, submissions of the assessee, judicial precedents on the issue and factual matrix of the case, deleted the penalty imposed u/s 271E of the Act observing that there is no contrav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken on merits, without regard to the tax effect and the monetary limits: a. Where any provision of the Act or the Rules or notification issued thereunder has been held to be constitutionally invalid, or b. Where any order, notification, instruction or circular of the Board or the Government has been held to be illegal or ultra vires the Act or otherwise constitutionally invalid, or c. Where the assessment is based on information in respect of any offence alleged to have been committed under any other law received from any of the law enforcement or intelligence agencies such as CBI, ED, DRI, SFIO, NIA, NCB, DGGI, state law enforcement agencies such as State Police, State Vigilance Bureau, State Anti-Corruption Bureau, State Excise Department, State Sales/Commercial Taxes or GST Department, or d. Where the case is one in which prosecution has been filed by the Department in the relevant case and the trial is pending in any Court or conviction order has been passed and the same has not been compounded, or e. Where strictures/adverse comments have been passed and/or cost has been levied against the Department of Revenue, CBDT or their officers, or f. Where the tax effect is not quan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... effect of the appeal is Rs. 48,64,586/- which is below the monetary limit prescribed in the Circular No. 17/2019 (Rs.50,00,000/-) as well as Circular No. 9/2024 (Rs.60,00,000/-) for filing the appeals before the Tribunal by the Department. It is the case of the Department that the penalty u/s 271E of the Act has been levied pursuant to the audit objections accepted by the Department and therefore the appeal falls within the exceptions carved out in Circular No. 3/2018 dated 11.07.2018 read with para 5 of Circular No. 9/2024 and para 3.1 and 3.2 of Circular No. 5/2024. On the other hand, the assessee s case is that Circular No. 3/2018 has been superseded by Circular No. 5/2024 and the exceptions contained in Circular No. 5/2024 and the enhanced monetary limit in Circular No. 9/2024 are applicable to the pending appeals before the Tribunal, wherein the exception clause on audit objection has been removed. The audit objection clause as an exception is not applicable to the present appeal by virtue of the revised exceptions provided in the latest Circular No. 5/2024 dated 15.03.2024 read with Circular No. 9/2024 dated 17.09.2024. 14. We have perused the decision of the Hon ble Rajastha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 3 of 2018 was modified by Circular 17 of 2019 dated 08.08.2019. The monetary limits were further enhanced and para 5 of the Circular was substituted. Para 4 of this Circular clarified that the modification shall apply with effect from the date of issue of the Circular. 14. Circular 3 of 2018 and Circular 17 of 2019 were superseded by Circular 5 of 2024 dated 15.03.2024. The monetary limits were enhanced and the exceptions for filing appeals inspite of low tax effect were in Para 3.1 3.2. The exception of audit objection having been accepted by department was no longer there. The Circular was made applicable to the appeals to be filed from the date of issue of the Circular. Para 10 of the Circular is quoted below:- This issues under section 268A of the Act and shall come into effect from the date of issue of this Circular. This Circular will apply to SLPs/appeals to be filed henceforth before the SC/HCs/Tribunals. 15. By Circular 9 of 2024 dated 17.09.2024, monetary limits specified in Circular 5 of 2024 were enhanced. The exceptions in Para 3.1 3.2 of Circular No.5 of 2024 were retained. 16. Para 5 of Circular 9 of 2024 is reproduced:- The modifications shall come into effect fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to note that the CBDT has also issued a Circular on 5-6-2007 directing the Department to examine all Appeals pending before this Court on case to case basis with further direction to withdraw cases wherein the criteria of monetary limits as per the prevailing instruction is not satisfied, unless the question of law involved or raised in Appeal or referred to the High Court for opinion is of a recurring nature required to be settled by the higher Court. 11. The aforesaid Circular makes it clear that on the date of issuance of Circular, prevailing instructions fixing monetary limit will hold good even for pending cases. Adopting the same approach, we are of the considered view that the CBDT Circular dated 15-5-2008 would be very much applicable to the pending cases requiring department to withdraw cases wherein the tax effect is less than the prescribed monetary limits. 12. At this juncture, it will also be relevant to mention that it was necessary for the CBDT to put a caveat, while issuing instructions vide its Circular dated 5-6-2007, that the Appeals involving substantial question of law of recurring nature should not be withdrawn since provision like section 268A of the Income- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 08 would be applicable to the cases pending before this Court either for admission or for final disposal and that it is binding on revenue. In this view of the matter, all these Appeals, having tax effect less than Rs. 4 lakhs, are dismissed with no order as to costs . 6. Accordingly in view of the judgment of Hon'ble Bombay High Court in case of CIT V/s Madhukar K Inamdar HUF (supra), the CBDT Circular No.5/2024 is applicable in the present appeals ITA Nos.173 174/Ind/2024 M.P. Police Sakh Sahakari Sanstha Mardyadit 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. We order accordingly. 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. 16. In light of the above discussion and respectfully following the decision of the Hon ble Rajasthan High Court (supra) and Indore Bench of Tribunal (supra) and in the absence of any contrary material and judicial precedent brought on record by the Revenue, we dismiss the appeal of the Revenue as not maintainable on acc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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