Case Law Details
Brief Facts of the case:
The assessee had claimed deduction u/s 80-IC of the Income Tax Act, 1961 in respect of job work income earned from the eligible business credited in the books.
The assesseecould not substantiate the source of cash credits and hence, the Assessing Officer treated the cash credits as unexplained income by invoking the provisions of Section 68 of the Income Tax Act, 1961. Assessing Officer passed an order disallowing the deduction u/s 80IC and also rejected the assessee’s business loss set off against business income by concluding that the income credited to job work was an unexplained cash credit against which claim of set off not available. Further, he taxed unexplained cash credit as deemed income u/s 68.The order of AO was challenged by the assessee before CIT(A), who reversed the order of AO by observing that since the unexplained cash credit has been offered to tax deduction under Sec 80IC can be allowed. Revenue moved the matter before ITAT Delhi.
Contention of the Assessee:
Learned Counsel for assessee instead of countering the additions made by AO challenged the appeal filling action of the Income Tax Department. He stated that the tax effect in this appeal is less than Rs.4lacs therefore,the Department ought not to have filed this appeal in view of the circular issued by the CBDT and the provisions contained in the section 268A of the Income Tax Act, 1961.Thus, the appeal filed by department is not tenable in law.
Contention of the Revenue:
On the other hand, Learned Counsel for Revenue supported the order of AO, but could not counter the fact that the tax effect in this appeal is less than Rs. 4lacs.Thus, the department is not allowed to file the appeal in view of the monetary notified under Sec 268A.
Decision of the ITAT:
After considering the submissions of both the parties and the materialon record, it is noticed that section 268A has been inserted by the FinanceAct, 2008 with retrospective effect from 01/04/1999. Section 268A says that the Board may, from time to time, issue orders, instructions or directions to other income-tax authorities, fixing such monetary limits as it may deem fit, for the purpose of regulating filing of appeal or application for reference by any income-tax authority under the provisions of this Chapter.
It is not in dispute that the Board’s instruction or directions issued to the other income-tax authorities are binding on those authorities; therefore, the Department ought not to have filed the appeal in view of the above mentioned section 268A since the tax effect in the instant case is less than the amount prescribed for not filing the appeal. CBDT has issued Instruction No. 5/2014 dated 10th July, 2014, by which the CBDT has revised the monetary limit to Rs. 4lacs for filing the appeal before the Tribunal.
Keeping in view the CBDT Instruction No. 5 of 2014 dated 10th July, 2014 and also the provisions of section 268A of Income Tax Act, 1961, we are of the view that the Revenue should not have filed the instant appeal before the Tribunal.
In view of the above, without going into merit of the case, the appeal filed by the Revenue is dismissed. Appeal filed ignoring the monetary limits prescribed under Sec 268A could not be entertained.
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