ASST. CIT-32(1), MUMBAI V. SHRI CHETAN VALCHAND MEHTA, MUMBAI

MA 296/MUM/2022

AI Insights

The case involves a miscellaneous application by the Revenue seeking recall of an order dismissing an appeal against Shri Chetan Valchand Mehta. The original appeal was dismissed based on the Central Board of Direct Taxes (CBDT) circular No.17/2019, which restricts appeals to the Income Tax Appellate Tribunal (ITAT) unless the tax effect exceeds INR 50,00,000. However, the Revenue argued that the case fell under an exception to this rule due to information received from the Sales-tax department, Government of Maharashtra, which was considered an external law enforcement agency. The Tribunal, referencing a similar case (DCIT vs M/s. Aluvind Architectural), held that the exceptions in the circulars apply only to quantum proceedings and not to penalty proceedings, leading to the dismissal of the Revenue's application.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 123262 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 04-01-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 24-11-2022
• Assessment Year: 2007-2008
• Appeal Filed On: 17-10-2022
• Other Referred Cases: DCIT vs M/s. Aluvind Architectural
• Laws Referred To: Circular No.17/2019, Circular No.3 of 2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tax effect; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “C” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI PAVAN KUMAR GADALE (JUDICIAL MEMBER) M.A. No.296/MUM/2022 (Arising out of ITA No. 105/MUM/2021) (Assessment Year: 2007-08) Assistant Commissioner of Income Tax, Circle-32(1) Room No.702, 7 th Floor Kautilya Bhavan, Bandra Kurla Complex, Bandra (East) Mumbai-400 051 Vs. Shri Chetan Valchand Mehta 506, Gayatri Apartment Mandpeshwar Road Borivali (W), Mumbai-400 092 PAN No. AFXPM3350 Applicant Respondent Revenue by : Shri Chetan Kacha, Sr.AR Assessee by : Shri Anant N Pai Date of Hearing : 25/11/2022 Date of pronouncement : 05/01/2023 ORDER PER OM PRAKASH KANT, AM This miscellaneous application has been preferred by the Revenue seeking recall of the order of the Tribunal dated 20 th February, 2022 passed in ITA No.105/Mum/2021 for Assessment Year 2007-08. 2. Ld.Departmental has dismissed the appeal on the ground that it was covered by the circular No.17/2019 issued by Central Board of Direct Taxes, New Delhi (CBDT) for not filing appeal before the ITAT in case of below the prescribed tax limit of this appeal was, however, falling into exception to the said circular as qualified by the CBDT in letter dated 20/08/2018 wherein it is mentioned that said tax effect circular will not be applicable where addition has been made based on the informat external law enforcement agencies, i.e. CBI, ED, etc. The Ld.DR further submitted that in this case information has been received from the Sales-tax department, Government of Maharashtra and, therefore, this appeals falls under the excep No.3 of 2018 as amended on 20 3. We have heard submission of relevant material on record including the circular referred by the Ld.DR. For ready reference, the relevant paragraph of the said circular is extracted as under: Ld.Departmental Representative submitted that the Tribunal ismissed the appeal on the ground that it was covered by the circular No.17/2019 issued by Central Board of Direct Taxes, New Delhi (CBDT) for not filing appeal before the ITAT in case of below limit of ₹50,00,000/-. The Ld.DR submitted this appeal was, however, falling into exception to the said circular as qualified by the CBDT in letter dated 20/08/2018 wherein it is mentioned that said tax effect circular will not be applicable where addition has been made based on the information received from external law enforcement agencies, i.e. CBI, ED, etc. The Ld.DR further submitted that in this case information has been received tax department, Government of Maharashtra and, therefore, this appeals falls under the exception 10(e) of circular No.3 of 2018 as amended on 20 th August, 2018. We have heard submission of rival parties and perused the relevant material on record including the circular referred by the . For ready reference, the relevant paragraph of the said as under:- Chetan Valchand Mehta M.A. 296/Mum/2022 2 Representative submitted that the Tribunal ismissed the appeal on the ground that it was covered by the circular No.17/2019 issued by Central Board of Direct Taxes, New Delhi (CBDT) for not filing appeal before the ITAT in case of below . The Ld.DR submitted that this appeal was, however, falling into exception to the said circular as qualified by the CBDT in letter dated 20/08/2018 wherein it is mentioned that said tax effect circular will not be applicable where ion received from external law enforcement agencies, i.e. CBI, ED, etc. The Ld.DR further submitted that in this case information has been received tax department, Government of Maharashtra and, tion 10(e) of circular and perused the relevant material on record including the circular referred by the . For ready reference, the relevant paragraph of the said 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 tha 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: a 10. Adverse judgments relating to the following issues sho notwithstanding that the tax effect entailed is less than the monetary limits specified in para 3 above or there is no tax effect: a) to d) xxxxxxxxxxxxxxxxxxxxxxxxxx e) Where addition is based on information received from extern law enforcement agencies such as CBI! ED! DRI! SFIO! Directorate General of GST Intelligence (DGGI). f)xxxxxxxxxxxxxxxxxxxxxxxx 4. On perusal of the above circular we find that the relevant clause 10(e) of the circular refers to proceedings. The penalty proceedings are different from the quantum proceedings and, therefore, same cannot be applied over the penalty proceedings. Mumbai Bench in the case of DCIT vs Pvt. Ltd in ITA No.6053/Mum/2019 for A.Y. 2009 29/10/2021 has also dismissed the appeal of the Revenue as not maintainable holding that said exception does not apply in case of appeal filed in penalty proceedings. In vi mistake apparent from record and, therefore, miscellaneous application filed by the Revenue is accordingly dismissed. 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 tha 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: a 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) to d) xxxxxxxxxxxxxxxxxxxxxxxxxx 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 f)xxxxxxxxxxxxxxxxxxxxxxxx On perusal of the above circular we find that the relevant clause 10(e) of the circular refers to addition in quantum proceedings. The penalty proceedings are different from the quantum proceedings and, therefore, same cannot be applied over the penalty proceedings. The co-ordinate bench of the Tribunal, Mumbai Bench in the case of DCIT vs M/s. Aluvind Architectural in ITA No.6053/Mum/2019 for A.Y. 2009-10 in order dated 29/10/2021 has also dismissed the appeal of the Revenue as not maintainable holding that said exception does not apply in case of appeal filed in penalty proceedings. In view of above, there is no mistake apparent from record and, therefore, miscellaneous application filed by the Revenue is accordingly dismissed. Chetan Valchand Mehta M.A. 296/Mum/2022 3 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: uld be contested on merits notwithstanding that the tax effect entailed is less than the monetary limits specified in al sources in the nature of law enforcement agencies such as CBI! ED! DRI! SFIO! Directorate General of GST On perusal of the above circular we find that the relevant addition in quantum proceedings. The penalty proceedings are different from the quantum proceedings and, therefore, same cannot be applied over ordinate bench of the Tribunal, ind Architectural 10 in order dated 29/10/2021 has also dismissed the appeal of the Revenue as not maintainable holding that said exception does not apply in case of ew of above, there is no mistake apparent from record and, therefore, miscellaneous application filed by the Revenue is accordingly dismissed. 5. In the result, miscellaneous application is dismissed. Order pronounced under Rule 34(4) of the ITAT Rules, 1963 on 05/01/2023. Sd/- (PAVAN KUMAR GADALE JUDICIAL MEMBER Mumbai; Dated: 05/01/2023 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// In the result, miscellaneous application is dismissed. Order pronounced under Rule 34(4) of the ITAT Rules, /2023. sd/ PAVAN KUMAR GADALE) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Sr. Private Secretary) ITAT, Mumbai Chetan Valchand Mehta M.A. 296/Mum/2022 4 In the result, miscellaneous application is dismissed. Order pronounced under Rule 34(4) of the ITAT Rules, sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Sr. Private Secretary) ITAT, Mumbai Chetan Valchand Mehta M.A. 296/Mum/2022 5