The Jharkhand High Court dismissed appeal filed by the Revenue holding not maintainable on the ground that the tax effect below monetary limit prescribed by Central Board of Direct Taxes (CBDT) and absence of audit objection.
A letter was issued by the Assistant Commissioner of Income Tax, wherein it was stated that the audit objection raised by the revenue audit is not acceptable (Annexure 3 of supplementary affidavit).
A re-assessment order under Section143(3) read with section 263 was passed by the Assessing Officer determining total assessed income after making addition on account of Security Deposit, Retention Money deposit etc.
The assessee, M/s Urmila RCP Projects Pvt Ltd, filed an appeal before the CIT(A), who dismissed the appeal. Thereafter, the Respondent-Assessee filed appeal before the learned ITAT. The ITAT allowed the appeal of the Assessee and the aforesaid disallowance of expenditure on account of Security Deposit, Retention Money deposit etc. was deleted.
The instant tax appeal has been filed by the Revenue before this Court against the deletion of aforesaid amount of on account of Security Deposit, Retention Money deposit etc.
During course of proceedings, the respondent Assessee has raised a preliminary objection with regard to maintainability of this appeal on the ground of tax effect as in view of circular no. 3/2018 dated 11.07.2018 the monetary limit for filing appeal under 260A of the Income Tax Act, 1961 shall be 1,00,00,000/- and above.
The amount of disputed issue in the aforesaid Tax Appeal is 2,05,96,503/- and the amount of tax in dispute on the said disputed issue is 68,64,814/- only (33.33% including Surcharge and Education cess) which is much below of Rs. 1,00,00,000/-. Therefore, in view of the Circulars (Annexure-A & A/1 issued by CBDT) and also in view of the settled proposition of law in this regard, the instant appeal filed by the department is otherwise not maintainable and therefore liable to be dismissed in limine.
It further transpires that the Commissioner of Income Tax instead of accepting the audit objection proceeded to initiate a proceeding under Section 263 and finally passed an order under the said section as according to him the original assessment order passed by the AO was erroneous in so far as it was prejudicial to the interest of revenue. The Bench comprising observed that “Thus, it is crystal clear that on the one hand the tax effect in the instant case is much below the monetary limit as enumerated in Circular No. 3/2018 read with Circular No. 17 of 2019 and on the other hand none of the exception clause much less the audit objection is involved in this case and as such, we are having no hesitation in dismissing this appeal on the question of maintainability itself.”
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