ITO EXMP, AGRA V. HARDAYAL CHARITABLE & EDUCATIONAL TRUST, FIROZABAD

MA 6/AGR/2019

AI Insights

The case involves the Income Tax Officer (Exemption), Agra, as the appellant, and Hardayal Charitable & Educational Trust, Shikohabad, as the respondent. The dispute originated from the assessment year 2012-13, where the Income Tax Officer made an addition of Rs. 2,30,00,000 under section 68 of the Income Tax Act, 1961, which was initially contested and resulted in a deletion by the CIT(A). The Department appealed to the ITAT, which dismissed the appeal based on the tax effect being below the monetary limit prescribed by CBDT Circular No.3 of 2018. However, upon review, it was found that the tax effect was actually above the limit, leading to the recall of the ITAT's earlier order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 705238 (ITAT-AGRA)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 30-06-2025
• Appeal Filed By: Department
• Order Result: Allowed
• Assessment Year: 2012-2013
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAHUL AGARWAL; PANKAJ TYAGI
• Assessee Lawyers: SAILENDER SHRIVASTAVA
• Keywords: Income from undisclosed sources; Tax effect
• Section: 68

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH ‘DB’ AGRA (Through Physical/Virtual Hearing) BEFORE SHRI SUNIL KUMAR SINGH, JUDICIAL MEMBER AND SHRI BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER MA No.06/Agr/2019 (Arising out of ITA No.245 & 246/Agr/2017) [Assessment Year: 2012-13] Income Tax Officer(Exemption), Sanjay Place, Agra Vs Hardayal Charitable & Educational Trust, 318-Shambhu Nagar, Shikohabad, PAN-AAATH7652M Appellant Respondent Respondent by Shri Sailender Shrivastava, Sr. DR Appellant by Shri Rahul Agarwal, Adv. & Shri Pankaj Tyagi, Adv. Date of Hearing 25.04.2025 Date of Pronouncement 30.06.2025 ORDER PER BRAJESH KUMAR SINGH, AM, This Miscellaneous Application filed by the Revenue seeking recalling of order passed by the Tribunal in ITA No.245 & 246/Agr/2017 relating to Assessment Year 2012-13. The content of Miscellaneous Application filed by the Revenue is reproduced hereunder:- “subject-Proposal for filing of Miscellaneous Application In the case of M/s Hardayal Charitable Education Trust (PAN AAATH7652M), Shikohabad, Firozabad-in ITA No. 245 & 246/Agra/2017 for A.Y.2012-13 dated 28.08.2018-Regarding Kindly refer to the above mentioned subject. 2 In this case, the assessment for A.Y. 2012-13 was completed vide order u/s 143(3)/148 dated 18.03.2015 determining total taxable income of Rs. 54,80,590/- as against 2 MA No.06/Agr/2019 returned income of Rs. NIL ( Net deficit as per income & Expenditure A/c of (-)Rs. 17519408/- after making addition of Rs. 23000000/- under section 68 of IT Act, 1961. 3. Aggrieved with the order, the assessee filed appeal before the learned CIT(A)-2, Agra. The learned CIT(A)-2, Agra vide para-6.3 of its order in ANo.67/CIT(A)-2/Agra/ITO- (E)/Agra/2015-16/108/ dated 28.02.2017 deleted the addition of Rs. 23000000/- made on account of income from undisclosed sources. 4. These appeals have been filed against the order of the Id. CIT(A) dated 28.02.2017 for A. Y.2012-13 by the Revenue. The Hon'ble ITAT, Agra Bench, Agra vide order dated 28.08.2018 (Copy enclosed) dismissed the appeal filed by the Revenue treating the tax effect below the prescribed monetary limit. In this case, notional tax effect is worked out at Rs. 7107000/- on the disputed amount of addition of Rs.23000000/-. 5. In view of the above facts and looking to the notional tax effect involved in this case which is above the prescribed monetary limit as per CBDT's circular No.3 of 2018 dated 11.07.2018, I have been directed to file miscellaneous application to recall the impugned order of ITAT Agra Bench, Agra.” 2. In this case, the assessee had filed the return of income of Rs.NIL (net deficit as per income and expenditure account of Rs.(-)1,75,19408/-). An amount of Rs.2,30,00,000/- was added by the AO u/s 68 of the Act. The assessment was completed u/s 143/148 of the Act dated 18.03.2025 assessed the taxable income of Rs.54,80,590/- (Rs.2,30,00,000 – Rs.1,75,19,408), which was deleted by the Ld. CIT(A)-2, Agra. 3. The plea of the Department is that the tax effect on the deletion of Rs.2,30,00,000/-, was worked out at Rs.71,70,000/- as notional tax effect involved in this case was above prescribed monetary limit as per CBDT Circular No.3 of 2018 dated 11.07.2018. 4. The ld. AR opposed the above Miscellaneous Application of the Department on the ground that the Tribunal was correct in holding that 3 MA No.06/Agr/2019 the tax effect on the total income determined of Rs.54,80,590/- was less than Rs.20 lakhs and therefore it was rightly dismissed by the Tribunal. 5. On the other hand, the Ld. DR supported the Miscellaneous Application of the Department and referred to para-5.1 of the CBDT Circular No.5/2024, dated 15th March, 2024. The relevant paragraph is reproduced hereunder:- “For this purpose, 'tax effect' means the difference between the tax on the total income assessed and the tax that would have been chargeable had such total income been reduced by the amount of income in respect of the issues against which appeal is intended to be filed (hereinafter referred to as 'disputed issues'). Further, 'tax effect' shall be tax including applicable surcharge and cess. However, the tax will not include any interest thereon, except where chargeability of interest itself is in dispute. In case the chargeability of interest is the issue under dispute, the amount of interest shall be the tax effect. In cases where returned loss is reduced or assessed as income, the tax effect would include notional tax on disputed additions. In case of penalty orders, the tax effect will mean quantum of penalty deleted or reduced in the order to be appealed against.” 6. Based on the above para, the ld. DR submitted that in case, where the returned loss is reduced and assessed as income, the tax effect would include notional tax on disputed addition and since disputed addition was Rs.2,30,00,000/- on which the tax effect was Rs.71,07,000/-, which was more than Rs.60 lakhs above the mandatory limit fixed for filing of appeal before the Tribunal. Therefore, the appeal filed by the Department before the Tribunal vide ITA No.245 and 246/Del/2017 for AY 2012-13 was maintainable. 7. We have considered the rival submissions and perused the materials available on record. It is an undisputed fact that in this case, the AO has made addition of Rs.2,30,00,000/- and in view of this addition, loss of 4 MA No.06/Agr/2019 Rs.1,75,19,408/- was wiped out and the total income was determined at Rs.54,80,590/-. In such as situation, the tax effect would be potential tax effect on the disputed additions which is Rs.2,30,00,000/- on which the tax effect comes to Rs.71,70,000/-. Therefore, we are of the considered view that there was a mistake apparent from record in the order dated 28.08.2018 of the Tribunal in ITA No.245 and 246/Agr/2017 for AY 2012- 13 by considering the tax effect to be less than Rs.20 lakhs in both the appeals, whereas the tax effect in both appeal is more than Rs.60 lakhs. We, therefore, recall the order dated 28.08.2018 in ITA No.245 and 246/Agr/2017 and direct the Registry to fix these appeals in regular course of hearing. 8. In the result, the Miscellaneous Application of the Deaprtment is allowed. Order pronounced in the open court on 30 June, 2025. Sd/- Sd/- [SUNIL KUMAR SINGH] [BRAJESH KUMAR SINGH] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated 30 .06.2025. f{x~{tÜ f{x~{tÜ f{x~{tÜ f{x~{tÜ Copy forwarded to: 1. Appellant 2. Respondent 3. PCIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, Agra "