2019 (6) TMI 393 - AT - Income Tax

Tribunal rejects Revenue's bid to recall order, cites CBDT Circular on appeal limits

The Deputy Commissioner of Income Tax, Circle-1, Jalgaon Versus Chhabi Electricals Pvt. Ltd.

The Tribunal dismissed the Revenue's Miscellaneous Application seeking to recall the Tribunal's order dated 19.07.2018 in ITA No.588/PUN/2016 for the ... Monetary limit for filing appeal by Revenue - low tax effect - rectification application u/s.254(2) - re-assessment proceedings in the case of assessee were initiated on the basis of information received from Sales Tax Department, Govt. of Maharashtra - amended Para 10 of CBDT Circular the monetary limit for filing appeals by the Department would not apply where addition is based on information received from external sources in the nature of law enforcement agencies such as CBI, ED, DRI, SFIO, Directorate General of GST Intelligence (DGGI) etc. - HELD THAT:- In the instant case, re-assessment proceedings were initiated on the basis of information received from Maharashtra State Sales Tax Department. Thus, we are of considered view that the exception mentioned in Para 10 (e) of the CBDT Circular No. 3 of 2018 (supra.) does not cover information received from State Sales Tax Department. Hence, the monetary limit as fixed by CBDT to file appeals by the Department would apply in the facts of the present case. We do not find any merit in the contentions of the Revenue. The Miscellaneous Application filed by the Revenue seeking recalling of the Tribunal order is dismissed, accordingly. Issues:1. Whether the Revenue's application to recall the Tribunal's order should be granted based on the CBDT CircularRs.2. Whether the exception specified in Para 10(e) of the CBDT Circular applies to the case where information is received from State Sales Tax DepartmentRs.3. Whether the monetary limit for filing appeals by the Department applies in this caseRs.Analysis:1. The Revenue filed a Miscellaneous Application under section 254(2) of the Income Tax Act, 1961, seeking to recall the Tribunal's order dated 19.07.2018 in ITA No.588/PUN/2016 for the assessment year 2009-10. The appeal was earlier dismissed by the Tribunal due to low tax effect.2. The Department argued that the re-assessment proceedings were initiated based on information from the Sales Tax Department, Govt. of Maharashtra. They contended that the case falls within the exception specified in Para 10(e) of the CBDT Circular, which exempts cases where additions are based on information from central enforcement agencies like CBI, ED, DRI, SFIO, or DGGI. The Department claimed that the monetary limit for filing appeals should not apply in such cases.3. The Assessee, on the other hand, argued that the CBDT Circular sets monetary limits for filing appeals by the Revenue, and in this case, the tax effect is below the specified limit. They contended that the information received from the State Sales Tax Department does not fall within the exceptions mentioned in the Circular.4. The Tribunal considered the arguments from both sides and analyzed the relevant clause of the CBDT Circular. They noted that the Circular exempts cases where information is received from central enforcement agencies and does not mention State Government departments like the Sales Tax Department. As the re-assessment was based on information from the State Sales Tax Department, the Tribunal held that the exception in Para 10(e) of the Circular does not apply. Therefore, the monetary limit set by the CBDT for filing appeals by the Department would apply in this case.5. Consequently, the Tribunal found no merit in the Revenue's contentions and dismissed the Miscellaneous Application seeking to recall the Tribunal's order. The decision was based on the interpretation of the CBDT Circular and the source of information for the re-assessment proceedings.6. Ultimately, the Tribunal pronounced the order on June 3, 2019, dismissing the Revenue's Miscellaneous Application.