2019 (9) TMI 377 - AT - Income Tax

Revenue's Appeals Dismissed by Tribunal for Low Tax Effect; Emphasizes CBDT Directive

Income Tax Officer, Ward-10 (2), New Delhi., Asstt. Commissioner of Income Tax, Circle-33 (1), New Delhi., DCIT, Circle 10 (2), New Delhi. Versus M/s Glitz Builders Pvt. Ltd., Shri Hemant Pal Singh Gill, Shri Inder Mohan Thapar, M/s Gupta Property Developers Pvt. Ltd., Tata Teleservices Ltd.

The appeals filed by the Revenue were dismissed as not maintainable by the Tribunal due to the tax effect being below the Rs. 50,00,000 threshold set by ... Low tax effect - maintainability of appeal - Application of the circular to the pending appeals before the tribunal - HELD THAT:- Revised / enhanced minimum threshold limit of tax effect of ₹ 50,00,000/- vide aforesaid recent CBDT Circular No. 17/2019 dated 08.08.2019 is applicable not only for appeals to be filed by Revenue in future; but also for appeals already filed by Revenue in ITAT. In view of the aforesaid recent CBDT Circular No. 17/2019 dated 08/08/2019; the direction in aforesaid earlier Circular dated 11.07.2018 to withdraw /not press Revenue’s appeal with tax effect below ₹ 20,00,000/-; is now to be read as direction to withdraw / not press Revenue’s appeal with tax effect below revised / enhanced limit of ₹ 50,00,000/-. By necessary implication, therefore, all existing appeals in ITAT, having tax effect below the revised / enhanced limit of ₹ 50,00,000/-, are to be treated as withdrawn / not pressed; and are, not maintainable. Relaxation in monetary limits for filing of appeals by Revenue in ITAT, vide aforesaid CBDT Circular dated 08.08.2019 shall be applicable also to the pending appeals in ITAT already filed by Revenue.CBDT Circulars and Instructions, which are beneficial for assessee, are binding on the authorities below. Accordingly, these appeals filed by Revenue are treated as withdrawn / not pressed by Revenue. Issues Involved:1. Addition in assessment u/s 153A without incriminating documents.2. Deletion of addition regarding penalty/damages charged by Hero Honda.3. Deletion of penalty u/s 271(1)(c).4. Deletion of addition on account of material consumed.5. Quashing of reassessment proceedings initiated u/s 115WG.Detailed Analysis:1. Addition in Assessment u/s 153A Without Incriminating DocumentsThe Revenue's appeal questioned whether the CIT(A) erred in holding that no addition can be made in the assessment completed u/s 153A if no incriminating documents were found. The Tribunal noted that the tax effect in the appeal was below the monetary limit set by the CBDT Circular No. 17/2019, which mandates that appeals with tax effects below Rs. 50,00,000 should be dismissed. Consequently, the appeal was dismissed as not maintainable.2. Deletion of Addition Regarding Penalty/Damages Charged by Hero HondaThe Revenue contended that the CIT(A) erred in deleting the addition of Rs. 88,44,657/- made by the AO concerning penalty/damages charged by Hero Honda. The Tribunal observed that the tax effect was below the Rs. 50,00,000 threshold as per the CBDT Circular No. 17/2019. Therefore, the appeal was dismissed as not maintainable.3. Deletion of Penalty u/s 271(1)(c)The Revenue challenged the deletion of a penalty amounting to Rs. 34,85,759/- u/s 271(1)(c) by the CIT(A). The Tribunal again noted that the tax effect was below the Rs. 50,00,000 limit set by the CBDT Circular No. 17/2019. Hence, the appeal was dismissed as not maintainable.4. Deletion of Addition on Account of Material ConsumedThe Revenue's appeal against the deletion of an addition of Rs. 80,00,000/- on account of material consumed was also considered. The Tribunal found that the tax effect was below the monetary limit of Rs. 50,00,000 as per the CBDT Circular No. 17/2019, leading to the dismissal of the appeal as not maintainable.5. Quashing of Reassessment Proceedings Initiated u/s 115WGThe Revenue questioned the CIT(A)'s decision to quash reassessment proceedings initiated u/s 115WG and delete additions of Rs. 1,04,74,439/- and Rs. 77,84,163/-. The Tribunal noted that the tax effect in these appeals was below Rs. 50,00,000, as per the CBDT Circular No. 17/2019. Therefore, these appeals were also dismissed as not maintainable.Conclusion:All the appeals filed by the Revenue were dismissed as not maintainable due to the tax effect being below the Rs. 50,00,000 threshold set by the CBDT Circular No. 17/2019. The Tribunal emphasized that appeals with tax effects below this limit should be withdrawn or not pressed, following the CBDT's directive to reduce litigation. The decision was pronounced in the Open Court and detailed in the written order dated 05/09/2019.