ITAT Dismisses Revenue's Appeal as Tax Effect Falls Below CBDT's Rs. 60 Lakh Threshold [Read Order]

The Income Tax Appellate Tribunal (ITAT) Kolkata bench has dismissed an appeal filed by the Income Tax Department against Intime Vanijya Private Limited, citing that the disputed tax amount of Rs. 7.97 lakh fell below the Rs. 60 lakh threshold prescribed under the Central Board of Direct Taxes (CBDT) Circular No. 09/2024.

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The case pertained to Assessment Year 2013-14, where the Assessing Officer had initially made an addition of Rs. 25.80 lakh under Section 68 of the Income Tax Act, 1961, treating certain transactions as unexplained cash credits. The National Faceless Appeal Centre (NFAC) had deleted this addition, prompting the Revenue to appeal before the ITAT.

The ITAT noted that the Revenue's appeal was filed with a delay of 153 days, which was condoned after accepting the Department's explanation about administrative pressures. However, during proceedings, it emerged that the actual tax effect involved was only Rs. 7.97 lakh, significantly below the Rs. 60 lakh monetary limit set by CBDT for filing appeals before the Tribunal.

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Dr. Manish Borad (Accountant Member) observed that the CBDT Circular No. 09/2024, dated September 17, 2024, explicitly prohibits filing appeals where the tax effect is below Rs. 60 lakh, unless exceptional circumstances apply. The bench clarified that while the appeal was being dismissed on this technical ground, the substantive issues raised by the Revenue remained open for examination in future proceedings if required.

The Tribunal granted liberty to the Department to seek recall of the order if the case fell under any exceptions mentioned in the CBDT Circular. The dismissal order emphasizes the judiciary's adherence to administrative guidelines aimed at reducing unnecessary litigation in small-tax-effect cases.

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This decision comes as part of the government's ongoing efforts to streamline tax litigation and reduce the backlog of cases in appellate forums. The CBDT's revised monetary limits are designed to ensure that the Department focuses its resources on high-value disputes while avoiding protracted litigation over smaller tax amounts. The order brings closure to this particular dispute while preserving the Department's rights to pursue the matter if higher stakes emerge in future assessments.

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