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

The Misc. Application was allowed by the ITAT due to a discrepancy in the tax effect calculation, making the appeal maintainable despite earlier dismissal for low tax effect. The disputed addition was corrected to be higher, justifying the appeal on grounds of tax effect. The ITAT directed a hearing within 90 days.

---

---

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.

---