ITO 6(1)(2), MUMBAI V. M/S ANIMS CONNEXION PVT LTD, MUMBAI

ITA 584/MUM/2020

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 9886 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-07-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 23-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Audit objection; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “SMC” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI SANDEEP SINGH KARHAIL (JUDICIAL MEMBER) ITA No. 584/MUM/2020 Assessment Year: 2011-12 Income Tax Officer-6(1)(2), Aayakar Bhavan, Maharshi Karve Road, Mumbai-400020. Vs. M/s Anims Connexion Pvt. Ltd., 11-12, Nimco Tiles Compound Lalbaug Industrial Estate Lalbaug, Mumai-400012. PAN No. AAGCA 4637 A Appellant Respondent Assessee by : None Revenue by : Mr. Ajeya Kumar Ojha, DR Date of Hearing : 30/06/2022 Date of pronouncement : 06/07/2022 ORDER PER OM PRAKASH KANT, AM This appeal has been preferred by the Revenue against the order dated 02.10.2019 passed by the Ld. Commissioner of Income- tax (Appeals)-12, Mumbai [in short ‘the Ld. CIT(A)’], for assessment year 2011-12, raising following grounds: 1. "On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made by the AO in respect of commission income o 2. "On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made by the AO in respect of sales returns of 3. "On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made by the AO in respect of Bank receipt of Rs.20,000/ 4. "Though the tax effect in this case is Rs.365,174/ this appeal has been filed because it is covered by exception mentioned in para 10(c) of the CBDT Circular No. 3/2018 dt 11-7. 2018 as subsequently clarified by Board letter dtd. 20/08/2018 vide effective as on date." 2. We have heard rival submissions of the parties on the issue dispute and perused the relevant material on record. In respect to the Ground No. 4 raised by the Revenue Circular is not applicable in the present appeal. The Ld. DR was asked to furnish evidence in support of the exception 10(c) of Central Board of Direct Taxes (CBDT) Circular NO. 3 of 2018, however, he failed to furnish any evidence in support of appeal falls under the exception 10(c) as listed in CBDT letter dated M/s Anims Connexion Pvt. Ltd "On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made by the AO in respect of commission income of ₹3,57,041/-." "On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made by the AO in respect of sales returns of ₹8,04,754/-. "On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made by the AO in respect of Bank receipt of Rs.20,000/-. "Though the tax effect in this case is Rs.365,174/ this appeal has been filed because it is covered by exception mentioned in para 10(c) of the CBDT Circular No. 3/2018 dt 7. 2018 as subsequently clarified by Board letter dtd. 20/08/2018 vide no. 279/misc./142/2007-ITJ (Pt.) which is effective as on date." We have heard rival submissions of the parties on the issue dispute and perused the relevant material on record. In respect to the Ground No. 4 raised by the Revenue it is stated Circular is not applicable in the present appeal. The Ld. DR was asked to furnish evidence in support of the exception 10(c) of Central Board of Direct Taxes (CBDT) Circular NO. 3 of 2018, however, he failed to furnish any evidence in support of appeal falls under the exception 10(c) as listed in CBDT letter dated M/s Anims Connexion Pvt. Ltd ITA No. 584/M/2020 2 "On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made by the AO in "On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made by the AO in "On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made by the AO in "Though the tax effect in this case is Rs.365,174/-, however this appeal has been filed because it is covered by exception mentioned in para 10(c) of the CBDT Circular No. 3/2018 dt 7. 2018 as subsequently clarified by Board letter dtd. ITJ (Pt.) which is We have heard rival submissions of the parties on the issue-in- dispute and perused the relevant material on record. In respect to it is stated that tax effect Circular is not applicable in the present appeal. The Ld. DR was asked to furnish evidence in support of the exception 10(c) of Central Board of Direct Taxes (CBDT) Circular NO. 3 of 2018, however, he failed to furnish any evidence in support of claim that appeal falls under the exception 10(c) as listed in CBDT letter dated 20.08.2018. The said exception 2018 is related to the case where Revenue audited objection has been accepted by the Department. part of the communication issued by the CBDT specify the exception to the Circular No. 3 of 2018 is reproduced as under: “All the Principal Chief Commissioners of Income Tax Subject: Amendment to para 10 of the Circular No. 3 of 201 dated 11.07.2018 Madam/Sir, Kindly refer to the above. 2. The monetary limits for filing of appeals by the Department before Income Tax Appellate Tribunal, High Courts and SLPs/ appeals before Supreme Court have been revised by Board’s Circular 11.07.2018. 3. Para 10 of the said Circular provides that adverse judgments relating to the issues enumerated in the said para should be contested on merits notwithstanding that the tax effect entailed is less than the monetary limits specified in para 3 thereof or there is no tax effect. Para 10 of the Circular No. 3 of 2018 dated 11.07.2018 is hereby “10. Adverse judgments relating to the following issues should be contested on merits notwithstanding that the tax ef monetary limits specified in para 3 above or there is no tax effect: (a) Where the Constitutional validity of the provisions of an Act or Rule is under challenge, or (b) Where Board’s order, Notification, Instruction or Cir to be illegal or ultra vires, or (c) Where Revenue Audit objection in the case has been accepted by the Department, or M/s Anims Connexion Pvt. Ltd 20.08.2018. The said exception 10(c) to the CBDT Circular No. 3 of is related to the case where Revenue audited objection has been accepted by the Department. For ready reference, the relevant part of the communication issued by the CBDT specify the exception to the Circular No. 3 of 2018 is reproduced as under: “All the Principal Chief Commissioners of Income Tax Subject: Amendment to para 10 of the Circular No. 3 of 201 dated 11.07.2018-reg: Kindly refer to the above. 2. The monetary limits for filing of appeals by the Department before Income Tax Appellate Tribunal, High Courts and SLPs/ appeals before Supreme Court have been revised by Board’s Circular No. 3 of 2018 dated 3. Para 10 of the said Circular provides that adverse judgments relating to the issues enumerated in the said para should be contested on merits notwithstanding that the tax effect entailed is less than the monetary limits specified in para 3 thereof or there is no tax effect. Para 10 of the Circular No. 3 of 2018 dated 11.07.2018 is hereby amended as under: “10. Adverse judgments relating to the following issues should be contested on merits notwithstanding that the tax effect entailed is less than the monetary limits specified in para 3 above or there is no tax effect: (a) Where the Constitutional validity of the provisions of an Act or Rule is under challenge, or (b) Where Board’s order, Notification, Instruction or Circular has been held to be illegal or ultra vires, or (c) Where Revenue Audit objection in the case has been accepted by the Department, or M/s Anims Connexion Pvt. Ltd ITA No. 584/M/2020 3 10(c) to the CBDT Circular No. 3 of is related to the case where Revenue audited objection has reference, the relevant part of the communication issued by the CBDT specify the exception “All the Principal Chief Commissioners of Income Tax Subject: Amendment to para 10 of the Circular No. 3 of 2018 2. The monetary limits for filing of appeals by the Department before Income Tax Appellate Tribunal, High Courts and SLPs/ appeals before No. 3 of 2018 dated 3. Para 10 of the said Circular provides that adverse judgments relating to the issues enumerated in the said para should be contested on merits notwithstanding that the tax effect entailed is less than the monetary limits specified in para 3 thereof or there is no tax effect. Para 10 of the Circular amended as under: “10. Adverse judgments relating to the following issues should be contested fect entailed is less than the monetary limits specified in para 3 above or there is no tax effect: (a) Where the Constitutional validity of the provisions of an Act or Rule is cular has been held (c) Where Revenue Audit objection in the case has been accepted by the (d) Where addition relates to undisclosed foreign income/ undisclosed foreign assets (including financial assets)/ account. (e) Where addition is based on information received from external sources in the nature of law enforcement agencies such as CBI/ ED/ DRI/ SFIO/ Directorate General of GST Intelligence (DGGI). (f) Cases where prosecution pending in the Court. ” 4. The said modification shall come into effect from the date o f issue of this letter. 5. The same may be brought to the knowledge of all officers working in your region. 6. This issues with the approval o 2.1 There is no mention in the order of Ld. CIT(A) that action has been taken in view of audit objection, which has been a absence of any evidence on record that addition in dispute relates to Revenue audit object the Ground No. 4 of the Revenue that No. 10(c) to the CBDT Circular cannot be accepted. Accordingly, the tax effect involved in the appeal i.e. ₹3,65,174/ i.e. ₹50,00,000/- for filing appeal before the Tribunal vide M/s Anims Connexion Pvt. Ltd (d) Where addition relates to undisclosed foreign income/ undisclosed foreign assets (including financial assets)/ undisclosed foreign bank (e) Where addition is based on information received from external sources in the nature of law enforcement agencies such as CBI/ ED/ DRI/ SFIO/ Directorate General of GST Intelligence (DGGI). (f) Cases where prosecution has been filed by the Department and is pending in the Court. ” 4. The said modification shall come into effect from the date o f issue of 5. The same may be brought to the knowledge of all officers working in 6. This issues with the approval of the Hon’ble Finance Minister. There is no mention in the order of the Assessing Officer or in the order of Ld. CIT(A) that action has been taken in view of audit objection, which has been accepted by the Ld. AO. absence of any evidence on record that addition in dispute relates to Revenue audit objection accepted by the Department, he Ground No. 4 of the Revenue that case falls under exception No. 10(c) to the CBDT Circular No. 3 of 2018 dated 11.07.2018 cannot be accepted. Accordingly, the tax effect involved in the 3,65,174/- being less than monetary limit prescribed for filing appeal before the Tribunal vide M/s Anims Connexion Pvt. Ltd ITA No. 584/M/2020 4 (d) Where addition relates to undisclosed foreign income/ undisclosed undisclosed foreign bank (e) Where addition is based on information received from external sources in the nature of law enforcement agencies such as CBI/ ED/ DRI/ SFIO/ Directorate General of GST Intelligence (DGGI). has been filed by the Department and is 4. The said modification shall come into effect from the date o f issue of 5. The same may be brought to the knowledge of all officers working in f the Hon’ble Finance Minister.” the order of the Assessing Officer or in the order of Ld. CIT(A) that action has been taken in view of ccepted by the Ld. AO. In absence of any evidence on record that addition in dispute ion accepted by the Department, falls under exception dated 11.07.2018, cannot be accepted. Accordingly, the tax effect involved in the being less than monetary limit prescribed for filing appeal before the Tribunal vide Circular No. 17 of 2019 dated 08.08.2019 appeal of the Revenue is dismissed application for restoring the appeal if there are evidence to substantial the claim raised in Ground No. 4 of the appeal Ground No. 1 to 3 are rendered merely academic. 3. In the result, the appeal of the Revenue is dismissed. Order pronounced in the Court on Sd/- (SANDEEP SINGH KARHAIL JUDICIAL MEMBER Mumbai; Dated: 06/07/2022 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. The CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. //True Copy// M/s Anims Connexion Pvt. Ltd Circular No. 17 of 2019 dated 08.08.2019, the ground No. 4 of the appeal of the Revenue is dismissed. With liberty to file application for restoring the appeal if there are evidence to the claim raised in Ground No. 4 of the appeal Ground No. 1 to 3 are rendered merely academic. In the result, the appeal of the Revenue is dismissed. ounced in the Court on 06/07/2022. Sd/- SANDEEP SINGH KARHAIL) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT forwarded to : BY ORDER, (Sr. Private Secretary ITAT, Mumbai M/s Anims Connexion Pvt. Ltd ITA No. 584/M/2020 5 ground No. 4 of the liberty to file application for restoring the appeal if there are evidence to the claim raised in Ground No. 4 of the appeal. The In the result, the appeal of the Revenue is dismissed. - OM PRAKASH KANT) MEMBER Sr. Private Secretary) ITAT, Mumbai