DCIT Vs Chhabi Electricals Pvt. Ltd. (ITAT Pune)
The Revenue filed a Miscellaneous Application under Section 254(2) of the Income Tax Act, 1961, seeking recall of the Tribunal’s order dated 19.07.2018 in ITA No. 588/PUN/2016 for AY 2009-10, by which the Revenue’s appeal had been dismissed on the ground of low tax effect.
The Department submitted that reassessment proceedings had been initiated based on information received from the Sales Tax Department, Government of Maharashtra. It contended that the case fell within the exception in Para 10(e) of CBDT Circular No. 3 of 2018 dated 11.07.2018, as amended by CBDT Letter F.No. 279/Mise.142/2007-ITJ(Pt) dated 20.08.2018. According to the Revenue, the exception covered additions based on information received from external sources in the nature of law-enforcement agencies and therefore the monetary limit for departmental appeals would not apply.
The assessee submitted that the tax effect was below the CBDT-prescribed monetary limit and that information received from the Maharashtra State Sales Tax Department did not fall within the exception specified in Para 10(e).
The Tribunal examined Para 10(e), which referred to external sources in the nature of law-enforcement agencies such as CBI, ED, DRI, SFIO and Directorate General of GST Intelligence (DGGI). It observed that the enforcement agencies referred to in the Circular were Central enforcement agencies and that the Circular did not mention enforcement agencies or departments of State Governments, including the Sales Tax Department.
