The Mumbai Bench of Income Tax Appellate Tribunal ( ITAT ) dismissed the Revenue’s appeal as infructuous due to the tax effect being below ₹60 lakhs, as outlined in the recently issued Circular No. 9/2024.
The Revenue appellant had filed an appeal challenging the order dated July 2, 2024, issued by the Commissioner of Income Tax (Appeals)[CIT(A)], National Faceless Appeal Centre ( NFAC ), for the assessment year ( AY ) 2016-17. The appeal raised issues regarding the reopening of proceedings under Section 148 of the Act, in connection with Old Girtonians Association Property Fund, the respondent-assessee.
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The Revenue had questioned whether the-assessee was eligible for exemption under Section 11, citing the proviso to Section 2(15), which restricts exemptions for entities engaged in commercial activities.
The Revenue had argued that the assessee’s activities fell under the seventh limb of the proviso to Section 2(15), disqualifying it from claiming exemption under Section 11. Additionally, the department had contended that the assessee failed to utilize its accumulated exempt income within the statutory time limit, which could have resulted in double taxation.
The reopening of the case was based on a fresh interpretation of the law following the Supreme Court’s ruling in ACIT (Exemptions) vs. Ahmedabad Urban Development Authority [2022].
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During the hearing, the Revenue’s representative admitted that the appeal had become infructuous due to the issuance of Circular No. 9/2024 on September 17, 2024. This circular had raised the monetary limit for filing appeals before the ITAT to ₹60 lakhs. Since the tax effect in the present case amounted to ₹57,92,897, the appeal no longer met the required threshold.
The assessee supported this submission, agreeing that the appeal had become non-maintainable due to the revised monetary limit.
After reviewing the submissions and considering the facts of the case, the ITAT dismissed the Revenue’s appeal.
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The two member bench comprising Raj Kumar Chauhan ( Judicial Member ) and Narendra Kumar Billaiya ( Accountant Member ) concluded that since the tax effect was below the updated monetary threshold, the appeal could not be maintained and was dismissed as infructuous.
In conclusion, the appeal was dismissed on the grounds of not meeting the revised monetary limit for filing appeals.
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