The ACIT, Circle-2(1)(2), Ahmedabad V. M/s. MAS Financial Services Ltd., Ahmedabad

ITA 1433/AHD/2019

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 1905 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 12-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Earning of tax free income; Tax effect
• Section: 14A; 268A

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “A” BENCH Before: Shri Waseem Ahmed, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member Th e ACIT, Circle-2 (1 )(2), Ah medabad (Appellant) Vs M/s. MAS Financial Services Ltd ., Ah med abad PAN: AABCM0 640A (Resp ondent) Asses see b y : None Revenue by : Shri S udhendu Das, Sr. D. R. Date of hearing : 18-05 -2 022 Date of pronouncement : 19-05 -2 022 आदेश /ORDER PER : SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER:- This is an appeal filed by the Revenue against the order of the ld. Commissioner of Income Tax (Appeals)-2, Ahmedabad in Appeal No. CIT(A)-2/10295/DCIT, Cir. 2(1)(2)/2018-19 vide order dated 12/07/2019 passed for the assessment year 2011-12. ITA No. 1433/Ahd/2019 Assessment Year 2011-12 I.T.A No. 1433/Ahd/2019 A.Y. 2011-12 Page No. ACIT vs. M/s MAS Financial Services Ltd. 2 2. The grievance of the Revenue is that the ld. CIT(A) has erred in deleting disallowance of Rs. 74,98,378/- in respect of expenditure relating to exempt income u/s 14A r.w.r. 8D of the Act. 3. At the outset, after going through the grounds of appeal and the impugned orders of the Revenue authorities below, a query was raised by the Bench as to applicability and maintainability of the appeal filed by the Revenue in view of CBDT Circular No. 17/2019 dated 8.8.2019 restricting the filling of the appeal by the Revenue where the tax effect is below Rs.50 lakhs, the ld. DR did not dispute the same and submitted that the issue is left to the Tribunal to be decided in accordance with law. 4. We find that the appeal of the Revenue is presented on 13.09.2019. On 8.8.2019 the CBDT had issued Instructions bearing No. 17 of 2019 prohibiting its subordinate authorities from filing of the appeal to the Tribunal against the order of the CIT(A) where the tax effect by virtue of the relief given by the CIT(A) is less than Rs.50 lakhs. In the present case, “tax effect” on the total income assessed minus the tax that would have been chargeable had such total income been reduced by the amount of income in respect of the issue against which appeal is filed, is Rs. 24,90,772/- i.e. it is less than Rs.50 lakhs. Further, the Revenue has brought on record anything to demonstrate that the case falls within the ambit of exceptions provided in the Circular. Thus, keeping in view the above CBDT Circular and provisions of section 268A of the Income Tax Act, we are of the view that the present appeal of the Revenue deserves to be dismissed. It is accordingly dismissed. I.T.A No. 1433/Ahd/2019 A.Y. 2011-12 Page No. ACIT vs. M/s MAS Financial Services Ltd. 3 5. However, it is observed that in case on re-verification at the end of the AO it comes to the notice that the tax effect is more or Revenue’s case falls within the ambit of exceptions provided in the Circular, then the Department will be at liberty to approach the Tribunal for recall of this order. Such application should be filed within the time period prescribed in the Act. In view of the above, the appeal of the Revenue is dismissed due to low tax effect. 6. In the result, the appeal of the Revenue is dismissed. Order pronounced in the open court on 19-05-2022 Sd/- Sd/- (WASEEM AHMED) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad : Dated 19/05/2022 आदेश क त ल प अ े षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/ आदेश से, उप/सहायक पंजीकार आयकर अपील य अ धकरण, अहमदाबाद