Appeal dismissed due to tax limit, CBDT instruction applied, revenue's appeal and assessee's cross objection dismissed.

The appeal by the revenue challenging the deletion of an addition under section 68 of the Income Tax Act was dismissed by the ITAT due to the tax effect being below the prescribed limit for filing an appeal. The ITAT considered the revised monetary limits for filing appeals and held that the instruction issued by the CBDT was applicable, leading to the dismissal of the revenue's appeal without considering the merits. Consequently, both the revenue's appeal and the assessee's cross objection regarding the validity of the reopening of assessment were dismissed.

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Issues:
1. Challenge to deletion of addition under section 68 of the Income Tax Act.
2. Validity of reopening of assessment by issuance of notice under section 148 of the Act.

Analysis:
1. The appeal by the revenue and the cross objection by the assessee arose from the CIT(A) order dated 16.4.2010 for the assessment year 2002-03. The revenue challenged the deletion of an addition of Rs. 13,79,700 made by the AO under section 68 of the Income Tax Act. On the other hand, the assessee's cross objection raised concerns about the validity of the reopening of assessment through a notice under section 148 of the Act.

2. The counsel for the assessee pointed out that the tax effect in the revenue's appeal was below the prescribed limit for filing an appeal before the ITAT, which was Rs. 4 lakhs. Referring to instruction No. 5/2014, which revised the monetary limits for filing appeals, the counsel relied on a Kolkata Tribunal Bench order in the case of DCIT vs. Sushila Saraogi. The Tribunal, after hearing both sides, considered the instruction issued by the CBDT on 10.7.2014 applicable to pending appeals. Citing judgments of various High Courts and the Tribunal's order in the case of Deputy Commissioner of Income Tax vs. Sushila Saraogi, it was held that the instruction was applicable. As the tax effect was below Rs. 4 lakhs, the appeal of the revenue was dismissed without delving into the merits. The lack of exceptional circumstances for filing an appeal despite the monetary limit being below the prescribed limit was noted.

3. As the revenue's appeal was dismissed, the assessee's cross objection was not taken up for adjudication. Consequently, both the appeal of the revenue and the cross objection of the assessee were dismissed. The decision was pronounced in the Open Court on 13th November, 2014.

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