DCIT CIRCLE-1, JALGAON V. MAHAVEER CIVIL ENGINEERING AND SERVICES PRIVATE LIMITED, JALGAON

MA 400/PUN/2022

AI Insights

The case involves the Deputy Commissioner of Income Tax, Circle-1, Jalgaon (Appellant) against Mahaveer Civil Engineering and Services Private Limited (Respondent) concerning an appeal dismissed by the ITAT due to low tax effect. The Revenue filed a Miscellaneous Application seeking to recall the ITAT's order, arguing that the case should be decided on merits as it involved information from the Sales Tax Department about bogus purchases from hawala dealers. The ITAT, referencing its previous decisions and the CBDT Circular, dismissed the application, affirming that the monetary limit applies unless specific exceptions are met, which were not demonstrated in this case.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 134143 (ITAT-PUNE)
• Duration Of Justice: 6 month(s) 8 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 06-07-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 20-04-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 28-12-2022
• Other Referred Cases: ITO vs. M/s Param Marketing, ITO vs. Yusuf Gulmmohmmed Patel, DCIT vs. M/s Rang Rasayan
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tax effect; Tax effect
• Section: 254(2)

Judgement Text

आयकर अपीलीय अिधकरण “ए” Ɋायपीठ पुणेमŐ। IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “A” :: PUNE BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER Miscellaneous Application No.400/PUN/2022 (Arising out of ITA No.39/PUN/2020) Assessment Year : 2011-12 The DCIT, Circle-1, Jalgaon. Vs Mahaveer Civil Engineering and Services Private Limited, 131, Khandesh Mill Shopping Complex, Railway Station Road, Jalgaon – 425001. PAN: AAFCM 5940 D Appellant / Revenue Respondent / Assessee Assessee by None. Revenue by Shri M.G.Jasnani – DR Date of hearing 21/04/2023 Date of pronouncement 07/07/2023 आदेश/ ORDER PER DR. DIPAK P. RIPOTE, AM: This Revenue’s Miscellaneous Application filed u/s. 254(1) of the Income Tax Act, 1961 [in short “the Act”] seeks to recall tribunal’s order dated 09.06.2022 passed in its main appeal ITA.No.39/PUN/2020. 2. The Revenue has moved this application by contending as under:- “MAY IT PLEASE YOUR HONOURS M.A.No.400/PUN/2022 Mahaveer Civil Engineering and Services Pvt. Ltd., 2 The Hon'ble ITAT has passed an order on 09.06.2022, in ITA No.39/PUN/2020, dtd.09.06.2022, in the departmental case vs. Mahavir Civil Engineering & Services Pvt. Ltd. 2. The Hon'ble ITAT vide above order dismissed the departmental appeal summarily as it is not maintainable in view of the monetary limit prescribed in the CBDT's Circular No. 17/2019, dtd. 08.08.2019, for filing of an appeal in ITAT. The Hon'ble ITAT has not dismissed the departmental appeal on merits and it has not delved on the issue that Department had received information from the Sales Tax Department about the purchases made by the present assessee from various dealers, which were hawala dealers only and filed an appeal before the Hon'ble ITAT. It may be submitted here that further appeal can be filed in cases where appeal is dismissed by the Appellate Authorities in cases where addition is based on the information received from external sources in the nature of law enforcement. In the present case, information was received from Sales Tax Directorate and all the purchases were treated as bogus purchases. Despite low tax effect as per above CBDT Circular, the appeal should have been decided on merits as the addition was based on information received from the outside agencies. 3. Therefore it is respectfully submitted that the dismissal of Departmental Appeal merely on the ground of low tax effect as per the CBDT's Circular, is quite unjust and unfair in as much as there is an exception to the tax effect that where there is information from the outside agencies, it should be decided on merits 4. It is significant to mention here that the Hon'ble ITAT in its above order in para 4 has specifically stated as below: "At this juncture, it is pertinent to note that the CBDT vide F. No. 279/MISC/M-l3/2018-ITJ, dtd. 20.08.2019, has clarified that the revised monetary limits so mentioned in Circular No. 17/2019 are applicable to all pending appeals. In view of the foregoing discussion, we dismiss the appeal filed by the Revenue. However; it is made clear that the tax effect in this appeal is found by the AO to be more than the prescribed monetary limit of Rs.50,00,000/- or the case(s) is found to be covered by an exception, it will be open to the Revenue to M.A.No.400/PUN/2022 Mahaveer Civil Engineering and Services Pvt. Ltd., 3 move the Tribunal for recalling the order." 5. In the light of the above directions of the Hon'ble ITAT, the present Miscellaneous Application u/s. 254(2) of the IT Act, 1961 is filed, as it is case of receipt of information from the DGIT(Inv), as well as from the Sales Tax Department, on the basis of which the assessment was framed. It is therefore prayed that the captioned order may kindly be recalled and the same may be decided on merits.” 3. Heard both the parties and perused the records. 4. The Revenue has contended that the ITAT in ITA No.39/PUN/2020 has dismissed the Revenue’s appeal on the ground of Low Tax Effect, below the monetary limit prescribed by the Central Board of Direct Taxes(CBDT). However, in the Miscellaneous Application the Revenue has claimed that this particular case is covered by exceptions mentioned in the CBDT Circular. There was information received by Department from Sales Tax Department about the purchases made by the assessee from hawala dealers. 5. This issue is covered by ITAT Pune in M.A.No.383/PUN/2022 dated 27.04.2023 held as under : “2. It emerges during the course of hearing that our order in issue dated 28.06.2022 has rejected the Revenue’s main appeal ITA.No.656/PUN./2022 as involving lower than the prescribed tax effect of Rs.50 lakhs as per the CBDT’s circular no.17/2019 dated 08.08.2019 made applicable to all pending appeals as well. M.A.No.400/PUN/2022 Mahaveer Civil Engineering and Services Pvt. Ltd., 4 3. Learned DR invited our attention to exception clause 10(e) of the CBDT’s circular no.3/2018 that we ought to recall our order hereinabove as such the tax effect limit does not apply to the ‘havala purchase’ transactions in issue. We note that this tribunal’s recent decision in Revenue’s similar miscellaneous application no.60/PUN/2019 dt. 14-01-2020 has already rejected the very pleadings as under : “2. We have heard the rival submissions and scanned through the relevant material on record. Having found that the tax effect in the instant appeal referred to by the Revenue is less than the monetary limits of Rs.50.00 lakh, the Tribunal dismissed the appeal of Revenue by virtue of CBDT Circular No.17/2019 dated 08-08-2019 revising upward the monetary limit to Rs.50.00 lakh for filing of appeals by the Department in Income-tax Cases before various appellate forums. 3. As regards the contention of the ld. DR that the appeal should not have been dismissed because the additions in the above case was made on the basis of information received from the Sales Tax Department, Govt. of Maharashtra about the assessee indulging in hawala transactions and hence covered in the exception clause of the Circular as referred to above, we find that such a contention has not been countenanced by the Pune Benches of the Tribunal in several cases including ITO vs. M/s Param Marketing (ITA No.1872/PUN/2019 dt.30-01-2020) and ITO vs. Yusuf Gulmmohmmed Patel (ITA No.1852/PUN/2019 dt.30-01-2020). Not only that, even the Miscellaneous application filed u/s 254(2) on this issue has also been dismissed in DCIT vs. M/s Rang Rasayan (M.A.No.60/PUN/2019 dt. 14-01-2020). No contrary view has been brought to our notice on behalf of the Revenue. Respectfully following the above precedent, we are not M.A.No.400/PUN/2022 Mahaveer Civil Engineering and Services Pvt. Ltd., 5 inclined to accept the Miscellaneous application filed by the Revenue.” 4. We adopt the above detailed reasoning mutantis mutandis to decline the Revenue’s instant miscellaneous application. Ordered accordingly. 5. This Revenue’s miscellaneous application is dismissed. 6. Thus, respectfully following the ITAT Pune’s order, the Miscellaneous Application of the Revenue is dismissed. 7. In the result, Miscellaneous Application raised by the Revenue is dismissed. Order pronounced in the open Court on 7 th July, 2023. Sd/- Sd/- (S.S.GODARA) (DR. DIPAK P. RIPOTE) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ᳰदनांक / Dated : 7 th July, 2023/ SGR* आदेशकᳱᮧितिलिपअᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The CIT(A), concerned. 4. The Pr. CIT, concerned. 5. िवभागीयᮧितिनिध, आयकर अपीलीय अिधकरण, “ए” बᱶच, पुणे / DR, ITAT, “A” Bench, Pune. 6. गाडᭅफ़ाइल / Guard File. आदेशानुसार / BY ORDER, // TRUE COPY // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे/ITAT, Pune.