Case Law Details

Case Name : DCIT V/s. M/s SMS Holdings (ITAT Delhi)
Appeal Number : ITA No. 692/Del. /2011
Date of Judgement/Order : 13/03/2012
Related Assessment Year : 2006- 07
Courts : All ITAT (5510) ITAT Delhi (1250)

We have heard the rival submissions and perused the material available on record. We find that the tax effect in the present case is below Rs.3 lakh and we find that as per this Board instruction No.3 dated 9.2.2011, the limit of tax effect for filing the appeal before the Tribunal has been increased to Rs. 3 lakhs and the  same for filing appeal before Hon’ble High Court has been increased to Rs.10 lakhs. In the case of CIT Vs. Rajan Ramanee (supra), the Hon’ble Delhi High Court has applied this Board instruction dated 9.2.2011 and dismissed the appeal of the revenue because of low tax effect.

In that case also, the appeal was filed by the revenue before the Hon’ble Delhi High Court prior to the date of this Board  instruction as submitted by ld.AR of the assessee and hence, we do not find any  merit in the submission of the ld. DR of the revenue that this Board instruction is applicable only to those appeals which are filed by the revenue after the date of this Board instruction. Since this Board instruction was applied by Hon’ble Delhi High Court to pending appeals also, the same is applicable in the present case also. Ld. DR of the revenue could not show that the tax effect in the present case is above Rs.3 lakhs and hence, this appeal of the revenue is not maintainable  because of low tax effect as per Board instruction No.3 of 9.2.2011.

INCOME TAX APPELLATE TRIBUNAL Delhi

ITA No. 692/Del. /2011 – Assessment Year: 2006- 07

DCIT V/s. M/s SMS Holdings

Date of Pronouncement :- 13-03-2012

 O R D E R

A.N.Pahuja:-

This appeal filed on 4.2.2011 by the Revenue against an order dated 25.10.2010 of the ld. CIT (Appeals)-XII, New Delhi, raises grounds relating to dis allowance u/s 14A of the Income-tax Act,1961[hereinafter referred to asd the ‘Act’].

2. At the outset, the Director of the assessee company pointed out that the tax effect in this appeal filed by the Revenue is Rs. 1,98,578/- i.e. below the limit of Rs.3 lakhs stipulated by the CBDT in their instruction no. 3/2011 dated 9th February, 2011.The ld. DR appearing before us could not point out that the case falls within any of the following exceptions in the aforesaid CBDT instruct ion :

(a) Where the Constitutional validity of the provisions of an Act or Rule are under challenge, or

(b) Where Board’s order, Notification, Instruction or Circular has been held to be illegal or ultra vires, or

(c) Where Revenue Audit objection in the case has been accepted by the Department.

3. We find that appeal in this case was filed on 4.2.2011 i.e. before the aforesaid instruction dated 9.2.2011. However, tax effect is below even Rs. 2 lacs, stipulated in CBDT instruct ion no. 5 of 2008 dated 15.5.2008. Moreover, a co-ordinate Bench vide their decision dated 4.3.2011 in the case  of ITO vs. Bhavya Softech (P) Ltd. in ITA No. 4514/Del./2010 ,following the decision dated 18.2.2011 of Hon’ble Delhi High Court in CIT Vs. Rajan Ramanee in ITA No. 230/D/2011, concluded as under;

“2. At the very outset, it was submitted by the ld.AR of the assessee that in the present case the tax effect of the dispute is below Rs. 3 lakhs and hence this appeal of the revenue is not maintainable in view of the Board’s new instructions No. 3 dated 9.2.2011.

3. Ld. AR of the assessee has submitted a copy of recent judgment of Hon’ble Delhi High Court rendered in the case of CIT Vs. Rajan Ramanee in I.T.A. No. 230/Del/2011dated 18.2.2011 in which Hon’ble Delhi High Court has applied the Board Instruction No. 3 of dated 9th February,2011, although the appeal was filed by the revenue before this date. It is a submission of the ld. AR of the assessee that since it is accepted by Hon’ble Delhi High Court that this Board instruction dated 9.2.2011 is applicable for all pending appeals also, the present appeal of the revenue is also to be dismissed.

4. Ld. DR of the revenue submitted that this Board instruction is applicable for all appeals of the revenue which are filed after the date of this Board instruction and therefore, this Board instruction is not applicable to the present appeal.

5. We have heard the rival submissions and perused the material available on record. We find that the tax effect in the present case is below Rs.3 lakh and we find that as per this Board instruction No.3 dated 9.2.2011, the limit of tax effect for filing the appeal before the Tribunal has been increased to Rs.3 lakhs and the  same for filing appeal before Hon’ble High Court has been increased to Rs. 10 lakhs. In the case of CIT Vs. Rajan Ramanee (supra), the Hon’ble Delhi High Court has applied this Board instruction dated 9.2.2011 and dismissed the appeal of the revenue because of low tax effect. In that case also, the appeal was filed by the revenue before the Hon’ble Delhi High Court prior to the date of this Board  instruction as submitted by ld.AR of the assessee and hence, we do not find any  merit in the submission of the ld. DR of the revenue that this Board instruction is applicable only to those appeals which are filed by the revenue after the date of this Board instruction. Since this Board instruction was applied by Hon’ble Delhi High Court to pending appeals also, the same is applicable in the present case also. Ld. DR of the revenue could not show that the tax effect in the present case is above Rs. 3 lakhs and hence, this appeal of the revenue is not maintainable  because of low tax effect as per Board instruction No.3 of 9.2.2011.”

4. In view of the foregoing and in the light of aforesaid instruct ions dated 15.5.2008 & 9.2.2011 of the CBDT, following the view taken by the co-ordinate Bench in their aforesaid decision, we have no alternative but to dismiss this appeal of the Revenue in limine.

Order pronounced in the court today.

NF

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