Case Law Details
DCIT Vs Krishna Kirpa Computer Industries P. Ltd (ITAT Delhi)
Delhi ITAT dismisses Revenue’s appeal as tax effect is below Rs 60 lakh monetary limit per CBDT circulars. Assessee’s cross objections withdrawn; ITAT Dismisses Revenue Tax Appeal Over Low Tax Effect; Tribunal Rules Appeal Below ₹60 Lakh Limit Not Maintainable.
The Income Tax Appellate Tribunal (ITAT), Delhi Bench, has dismissed an appeal filed by the Revenue, citing that the tax effect involved was below the monetary limit prescribed for filing appeals before the tribunal.
The appeal was filed by the Deputy Commissioner of Income Tax (DCIT) challenging an order of the Commissioner of Income Tax (Appeals) for the assessment year 2015-16.
During the hearing, counsel for the assessee, Krishna Kirpa Computer Industries P. Ltd., argued that the Revenue’s appeal was not maintainable due to the low tax effect. They presented a copy of the tax computation form provided to the assessee along with the assessment order, which indicated a total tax demand of Rs. 57,09,181/-. This amount, they contended, was less than the monetary limit of Rs. 60 lakhs set by the Central Board of Direct Taxes (CBDT) for the Revenue to file appeals before the ITAT, referencing Income Tax Circular No. 9/2014.
The Learned Departmental Representative (DR), appearing for the Revenue, acknowledged that while Form No. 36 showed a higher demand, the tax computation provided to the assessee indeed reflected a demand below Rs. 60 lakhs.
The Tribunal, after considering the submissions and reviewing the tax computation form, held that the tax effect involved in the appeal was less than the prescribed monetary limit of Rs. 60 lakhs. Consequently, the ITAT ruled that the Revenue’s appeal was liable to be dismissed on the ground of low tax effect, in line with the CBDT’s instructions that govern the filing of appeals by the department.
The Tribunal granted the Revenue the liberty to seek revival of the appeal only if the case fell under any of the specific exceptions listed in paragraph 3.1 of the updated CBDT Circular No. 5/2024 dated March 15, 2024, which further refined the guidelines for filing appeals.
In light of the dismissal of the Revenue’s appeal on this preliminary ground, the assessee’s Cross Objections were withdrawn and accordingly dismissed by the Tribunal.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal by the Revenue is directed against the order of Commissioner of Income Tax (Appeals)-5, New Delhi (hereinafter referred to as ‘the CIT(A)’) dated 30.09.2019, for assessment year 2015-16. The assessee has filed Cross Objections in appeal filed by the Revenue.
2. Shri Divyanshu Agarwal, appearing on behalf of the assessee submitted that appeal by Revenue is liable to be dismissed on account of lower tax effect. He furnished a copy of Tax Computation received by the assessee along with assessment order to show that the total demand as per the tax computation is Rs.57,09,181/- which is less than the monetary limit for filing of appeal by the Revenue before the Tribunal in terms of Circular No. 9/2014.
3. The ld. DR pointed that as per Form No. 36, the total demand is Rs.98,57,359/-. However, he fairly submitted that as per tax computation the demand is less than Rs.60 lakhs.
4. In view of the fact that tax effect involved in appeal as per Income Tax Computation Form provided to the assessee along with assessment order is less than Rs. 60 lakhs, appeal of the Revenue is liable to dismissed on account of low tax effect. We hold accordingly.
5. Liberty is granted to the Revenue to revive appeal, in case the addition is made on account of any exception provided in para 3.1 of Circular No. 5/2024 dated 15.03.2024.
6. The ld. Counsel for the assessee made a statement at Bar, that since appeal of the Revenue is dismissed on account of low tax effect, he is not pressing cross objections and is withdrawing the same. Accordingly, the cross objection of the assessee is dismissed as withdrawn.
7. In the result, appeal of the Revenue and cross objection of the assessee are dismissed.
Order pronounced in the open court on Friday the 10th day of January, 2025.
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