ITO Vs Heera C. Gujrani (ITAT Mumbai)
The Income Tax Appellate Tribunal (ITAT), Mumbai, adjudicated revenue appeals for Assessment Years 2009–10 and 2010–11 against orders of the Commissioner of Income-tax (Appeals). At the outset, the assessee submitted that the tax effect involved in both appeals was below the prescribed monetary threshold of ₹50 lakh as per CBDT Circular No. 17/2019 dated 08.08.2019. Supporting computations were placed before the Tribunal.
The Departmental Representative did not dispute the tax effect but argued that the additions related to alleged bogus purchases based on information from the Investigation Wing. Upon examination, the Tribunal found that the tax effect in both appeals was below the threshold limit and, therefore, the appeals were not maintainable in terms of the CBDT circular. It also noted that the Investigation Wing is an internal arm of the department and does not qualify as an external law enforcement agency under the exceptions provided in the circular.
Accordingly, the Tribunal dismissed both appeals on the ground of low tax effect without examining the merits. However, it granted liberty to the revenue to seek recall of the appeals if it is later found that the case falls within any exception or if the tax effect exceeds the prescribed limit.
