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.
