DCIT CIRCLE-2(1)(1), AGRA V. KIE ENGINEERING PVT LTD, AGRA

MA 24/AGR/2020

AI Insights

The case involves the Deputy Commissioner of Income Tax (DCIT), Circle 2(1)(1), Agra, as the applicant, and M/s. KIE Engineering Pvt. Ltd., Agra, as the opposite party. The Revenue filed a miscellaneous application under section 254(2) of the Income-tax Act, 1961, seeking to recall an earlier order of the Tribunal dated 11.09.2019. The recall was sought on the grounds that the tax effect considered in the earlier decision was based on an incorrect lower tax effect, whereas the actual tax effect was Rs. 75,34,911, and the case fell under the exception of audit objection. The Tribunal, after reviewing the submissions and calculations presented by both parties, found that the Revenue had miscalculated the tax effect and that the exception of audit objection was no longer valid under the current circulars.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 772345 (ITAT-AGRA)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 27-08-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Assessment Year: 2011-2012
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIL KUMAR
• Assessee Lawyers: AMAN BASLAS
• Keywords: Tax effect; Audit objection
• Section: 115JB

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI SUNIL KUMAR SINGH, JUDICIAL MEMBER AND SHRI BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER M.A. No. 24/Agr/2020 (in ITA No.470/Agr/2018) Assessment year : 2011-12 DCIT, Circle 2(1)(1), Agra. Vs. M/s. KIE Engineering Pvt. Ltd., 74-B, Industrial Estate, Nunhai, Agra. PAN : AAACK4841Q (Applicant) (Opposite Party) ORDER PER : SUNIL KUMAR SINGH, JUDICIAL MEMBER: Revenue has moved an application u/s. 254(2) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”) with a prayer to recall the order dated 11.09.2019 passed by the Tribunal in ITA No. 470/Agr/2018, on the ground that the case was decided merely on the low tax effect, whereas the tax effect in this case is being arrived at Rs.75,34,911/- and further that the case is also covered under the permissible exception of audit objection. Assessee by Sh. Aman Baslas, C.A. Department by Sh. Anil Kumar, Sr. DR. Date of hearing 18.07.2025 Date of pronouncement 27.08.2025 Printed from counselvise.com MA No. 24/Agr/2020 2 | P a g e 2. Perused the records. Heard learned DR for the revenue and Ld. representative for the assessee. 3. It transpires from the revenue’s miscellaneous application that nothing has been explained in respect of the figure arrived at with respect to the tax effect. However, the assessee has submitted that the tax effect has to be calculated @ 18% MAT u/s. 115JB as against 30% calculated by the revenue. In this view of the matter, perusal of form-36 placed on records of ITA No. 470/Agr/2018 shows that the revenue has mentioned the total income computed by the Assessing Officer for the relevant assessment year as Rs.2,26,83,560/-. Similarly, revenue has also mentioned in the second ground of appeal that the assessee is liable to pay tax as per MAT provision u/s. 115JB of the Act. It is, therefore, abundantly clear that according to section 115JB, the calculation at the rate of 18.5% (eighteen and one half per cent) has to be resorted to for the computation of tax liability, which according to the assessee is shown to be Rs.45,20,950/- as against Rs.75,34,911/- shown by the revenue. In absence of any explanation or counter argument by the revenue, we accept the argument of the assessee and hold that revenue has wrongly calculated the tax effect, which is less than the monetary limit of Rs.60 lacs decided by the CBDT vide Circular No. 09/2024 dated 17.09.2024. Printed from counselvise.com MA No. 24/Agr/2020 3 | P a g e 4. We further notice that the revenue seems to have filed this present miscellaneous application on the basis of the exception of revenue audit objection as contained in para 10(c) of CBDT circular No. 3 of 2018 dated 11.07.2018. The reliance of Ld. DR for applicant revenue on the exceptions carved out in circular No. 3/2018 cannot be sustained, as the circular No. 3/2018 and circular No. 17/2019 were superseded by circular No. 5/2024 dated 15.03.2024 and the exceptions of circular No. 5/2024 with enhanced monetary limit in CBDT circular No. 9 of 2024 dated 17.09.2024 have been made applicable to pending appeals. The exception of ‘audit objection’ having been accepted by the department is no longer there. This apart, as we have held above that the revenue has also failed to prove that the tax effect in the present matter is more than 60 lacs. Hence, the application is liable to be dismissed in view of aforesaid discussion. 5. In the result, revenue’s miscellaneous application is dismissed. Order pronounced in the open court on 27.08.2025. Sd/- Sd/- (BRAJESH KUMAR SINGH) (SUNIL KUMAR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 27.08.2025 *aks/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, Agra Printed from counselvise.com "