2022 (2) TMI 1232 - AT - Income Tax

Appeal Allowed Despite Low Tax Effect Dismissal; Correction Justified, Hearing Ordered

The Dy. Commissioner of Income Tax (IT), 4 (1) (1), Mumbai Versus M/s Reliance Globalcom. Ltd. C/o SV Doshhi & Com.

The Misc. Application was allowed by the ITAT due to a discrepancy in the tax effect calculation, making the appeal maintainable despite earlier dismissal ... Rectification of mistake u/s 154 - maintainability of appeal before Tribunal due to low tax effect - HELD THAT:- On looking at the assessment order it is apparent that the total income assessee is ₹ 3,58,24,774/-. The above sum is a provision of maintenance activities income received from Tata Communication Limited as fees for technical services which is taxed under section 115A of the Act at the rate of 25%. The CIT(A) deleted the above addition. Revenue preferred the appeal before ITAT. The tax involved in the above appeal is at the rate of 25% of the above sum which comes to ₹ 89,55,193/-, therefore, apparently, the appeal of the Revenue is maintainable and not covered by low tax effect instructions. As the above mistake is apparent from the record, the order passed by the ITAT is recalled and Misc. Application filed by the learned Assessing Officer is allowed and registry is directed to fix hearing of this appeal within 90 days by notice to the assessee. Issues:1. Maintainability of the appeal due to low tax effect.Analysis:The Misc. Application pertains to ITA No. 2319/Mum/2019 filed by the learned Assessing Officer. The co-ordinate Bench had earlier dismissed the appeal on the grounds of low tax effect, noting the disputed addition of &8377;27,93,867. However, the Misc. Application highlights a discrepancy stating the impugned addition was actually &8377;3,58,20,774 with a tax effect of &8377;94,08,327. The total income of the assessee is &8377;3,58,24,774, comprising maintenance activities income from Tata Communication Limited, taxed under section 115A at 25%. The CIT(A) had deleted this addition, leading the Revenue to appeal before the ITAT. The tax involved in the appeal amounts to &8377;89,55,193 at a rate of 25%, making the appeal maintainable and not subject to low tax effect instructions. Consequently, the ITAT recalled its previous order and allowed the Misc. Application, directing the registry to schedule a hearing for the appeal within 90 days, with notice to the assessee.In conclusion, the Misc. Application filed by the learned Assessing Officer was allowed, and the order was pronounced on 21.02.2022.