Jurisdictional Income-tax Officer Vs Elphinstone Paper Box Manufacturing Co. (ITAT Mumbai)
Held that tax effect in the departmental appeal is less than Rs. 50 Lakhs as revised vide circular dated 08/08/2019. Appeal rejected.
Facts-
In the present appeal by the revenue, it has agitated deleting of additions which was made by AO alleging the purchases made from one of the parties namely M/s Bigwin Paper Distributor Private Limited as bogus.
Assessee contended that the issues of appeals are being covered by the tax effects Circular issued by the Central Board of Direct Taxes (CBDT) and the appeals of the Department are not maintainable because the monetary tax effect is less than 50 lakhs.
Whereas, the revenue contended that the information was received from the Sales Tax Authorities regarding bogus purchases i.e., from an external source and therefore appeals of the assessee fall under the exception 10(e) clause of the circular, according to which wherever information has been received from external sources, those appeals shall not be covered by the tax effects circular.
Conclusion-
We find that tax effect in these appeals is not exceeding the monetary limit, which has been revised by the CBDT vide circular dated 08/08/2019 for the purpose of the filing of the appeal by the Department before the Income-Tax Appellate Tribunal from 20.00 lakhs to 50.00 lakhs. Thus prima facie, the appeals of the Department are not maintainable in view of monetary tax effect being less than Rs.50 lakh.
The exception 10(e) which has been referred by the Ld. DR related to the cases whether information from the external sources in the nature of law enforcement agencies such as CBD/ED/DRI/SFIO/Directorate General of GST Intelligence (DGGI) etc. Whereas the Investigation Wing of the Income Tax Department is part of the Income Tax Department and administratively as well as functionally it is a part of the Income Tax Department and not external law enforcement agency as specified in the aforesaid exception.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
These appeals by the Revenue and cross-objection by the assessee(s) are directed against separate orders passed by the Commissioner of Income-tax (Appeals)-42, Mumbai [in short ‘the Ld. CIT(A)’] for different assessment years.
2. In the grounds, Revenue has agitated deleting of additions, which were made by the Assessing Officer alleging the purchases made from one of the party namely “M/s Bigwin Paper Distributor Private Limited” as bogus.
3. In the cross-objection, the assessee has raised one of the issue of appeals being covered by the tax effects Circular issued by the Central Board of Direct Taxes(CBDT), New Delhi.
4. Before us, the Ld. DR on the issue of appeals covered by tax effects Circular, submitted that in these cases information was received from the Sales Tax Authorities regarding bogus purchases and therefore appeals of the assessee falls under exception clause of the circular, according to which wherever information has been received from external sources, those appeals shall not be covered by the tax effects circular.
5. In the rejoinder, the Ld. counsel of assessee submitted that sales tax information was received in the case of “Bigwin Paper Distributor Private Limited” and thereafter in that case survey proceeding was conducted, wherein it was found that said party has issued further bills in the case of the assessees before us in cross-objection. According to the Ld. counsel, these facts are amply clear from the body of the assessment order, and therefore exception clause does not apply to these appeals and same are covered by the tax effects circular.
6. We have heard submission of the both parties on the issue in dispute. The tax effect in these appeals is reproduced in the chart below:
