Income Tax effect Less than Rs. 60 lacs: ITAT Dismisses Revenue’s Appeal

DCIT Vs Parasram Holdings Pvt. Ltd. (ITAT Delhi)

Income Tax Appellate Tribunal (ITAT) Delhi dismissed the appeal filed by the Revenue in the case of DCIT Vs Parasram Holdings Pvt. Ltd. The appeal challenged the order of the Commissioner of Income Tax (Appeals) [CIT(A)] dated August 3, 2023, which had ruled in favor of the assessee for Assessment Year (AY) 2020-21. The Revenue’s contention was rendered inadmissible due to the monetary threshold prescribed under CBDT Circular No. 09/2024, dated September 17, 2024, which restricts appeals where the tax effect is below Rs.60 lakh.

The tribunal observed that the tax effect in the present case was below the prescribed limit, making the appeal untenable. The circular issued by the Central Board of Direct Taxes (CBDT) serves as a binding directive for tax authorities, aimed at reducing litigation and optimizing judicial resources. The ITAT, following established judicial precedents, reaffirmed that departmental appeals failing to meet the threshold are not maintainable.

Several judicial precedents, including CIT v. Surya Herbal Ltd. [2011] 15 taxmann.com 120 (SC) and CIT v. DLF Ltd. [2012] 21 taxmann.com 194 (Delhi HC), have emphasized that CBDT circulars are binding on the tax department. The ITAT has consistently dismissed appeals below the prescribed monetary limit, barring exceptional circumstances such as recurring legal issues or significant policy implications.

With the appeal dismissed, the ruling in favor of Parasram Holdings Pvt. Ltd. remains undisturbed. The tribunal’s decision aligns with the government’s objective of reducing litigation in cases where the revenue involved is minimal. The order was pronounced in open court on January 15, 2025.

FULL TEXT OF THE ORDER OF ITAT DELHI

The aforetitled appeal arising out of the order dated 03.08.2023 passed by the Learned Commissioner of Income Tax (Appeals), Delhi-28 (for the sake of convenience, here in after referred in short as Ld. CIT(A)] by which the application filed by the Revenue / appellant against the order dated 30.09.2021 passed by the Assessing Officer [(for the sake of convenience, here in after referred in short as Ld. AO)] for A.Y. 2020-21.

2. The grievance of the Revenue shows that the tax effect would be less than Rs.60 lacs, therefore, the present appeal filed by the Revenue is not admissible in the light of the CBDT Circular No.09 of 2024 dated 17/09/2024. The appeal is accordingly dismissed.

3. In the result, the appeal filed by the revenue is accordingly dismissed.

Order pronounced in open Court on 15^th January, 2025.