While dismissing a departmental appeal, the Income Tax Appellate Tribunal (ITAT), Jaipur has held that the intelligence wing of the income tax department, being a part of the department, cannot be considered as an external law enforcement agency for the purpose of the low tax effect circular issued by the Central Board of Direct Taxes (CBDT).
In the instant case, the tax effect in the appeal filed by the department was below the monetary limit as revised by the CBDT vide Circular dated 08.08.2019 for the purpose of filing of appeal by the department before the Income Tax Appellate Tribunal from Rs. 20,00,000/- to Rs. 50,00,000/-.
As per the CBDT directive dated 20th August 2018, the appeal cannot be dismissed for not exceeding the monetary limit if the 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).
After perusing the provisions of the directive, the Tribunal held that “the exception 10(e) which has been referred by the ld DR relates to cases 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). Both administratively and functionally, there cannot be any dispute that the Investigation Wing of Income Tax Department is part of the Income Tax Department and is therefore clearly not an external law enforcement agency and that too, as specified in the aforesaid exception. Therefore, in the instant case, where the matter has been reopened based on information received from Investigation Wing and the assessment has been completed by the Assessing officer where the matter under appeal has tax effect less than the prescribed limit, it will continue to be governed by low tax effect circular issued by the CBDT which is binding on the Revenue.”
Subscribe Taxscan Premium to view the Judgment
