2021 (4) TMI 1383 - AT - Income Tax

Tax Appeal Dismissed: ITAT Ahmedabad Rejects Revenue's Appeal for A.Y. 2006-07 Due to Low Tax Effect Under CBDT Guidelines.

The DCIT, Circle-3 (1) (1), Ahmedabad Versus M/s. N.K. Industries Ltd.

The ITAT Ahmedabad dismissed the Revenue's appeal for A.Y. 2006-07 due to a low tax effect below Rs.50 lakhs, in accordance with CBDT Circular No. ... Maintainability of the appeal filed by the Revenue before ITAT - low tax effect - HELD THAT:- In the present case, “tax effect” on the total income assessed minus the tax that would have been chargeable had such total income been reduced by the amount of income in respect of the issue against which appeal is filed, is less than Rs.50 lakhs. Further, the case of the Revenue does not fall within the ambit of exceptions provided in the Circular. Thus, keeping in view the above CBDT circular and provisions of section 268A, we are of the view that the present appeal of the Revenue deserves to be dismissed. It is accordingly dismissed. However, as observed that in case on re-verification at the end of the AO it comes to the notice that the tax effect is more or Revenue’s case falls within the ambit of exceptions provided in the Circular, then the Department will be at liberty to approach the Tribunal for recall of this order. Such application should be filed within the time period prescribed in the Act. In view of the above, the appeal of the Revenue is dismissed due to low tax effect. The ITAT Ahmedabad dismissed the Revenue's appeal for A.Y. 2006-07 due to low tax effect below Rs.50 lakhs as per CBDT Circular No. 17/2019 dated 8.8.2019. The appeal was presented on 1.2.2019, but the Circular applied with retrospective effect, so the appeal was dismissed. The Revenue can approach the Tribunal for recall if tax effect increases or falls within exceptions. The appeal was dismissed on 05-04-2021.