ITAT rejected the departmental appeal since the amount of tax less than 50 lakhs
Facts and Issues of the Case
Before us, the Ld. DR on the issue of appeals covered by tax effects Circular, submitted that in these cases information was received from the Sales Tax Authorities regarding bogus purchases and therefore appeals of the assessee falls under exception clause of the circular, according to which wherever information has been received from external sources, those appeals shall by the tax effects circular.
In the rejoinder, the Ld. counsel of assessee sales tax information was received in the case of submitted that “Bigwin Paper Distributor Private Limited” and thereafter in that case survey proceeding was conducted, wherein it was found that said party has issued further bills in the case of the assessees before us in cross-objection. According to the Ld. counsel, these facts are amply clear from the body of the assessment order, and therefore exception clause does not apply to these appeals and same are covered by the tax effects circular.
Observation by the court
The court had heard the submission of the both parties on the issue in dispute. The court had find that tax effect in these appeals is not exceeding the monetary limit, which has been revised by the CBDT vide circular for the purpose of the filing of the appeal by the Department before the Income-Tax Appellate Tribunal from ₹ 20.00 lakhs to ₹ 50.00 lakhs. Thus prima facie, the appeals of the Department are not maintainable in view of monetary tax effect being less than ₹50 lakh.
The Ld. DR however, submitted that the case falls under exception clause communicated by the CBDT. The court referred to exceptions have been CBDT directive carved out to relating to withdrawal/non-filing appeal by the Department in low tax effect appeals. The CBDT has specified several instances despite their low tax effect. The exception 10(e) which has been referred by the Ld. DR related to the cases whether information from the external sources in the nature of law enforcement agencies such as CBD/ED/DRI/SFIO/Directorate General of GST Intelligence (DGGI) etc. Whereas the Investigation Wing of the Income Tax Department is part of the Income Tax Department and administratively as well as functionally it is a part of the Income Tax Department and not external law enforcement agency as specified in the aforesaid exception. The issue precipitated before us is whether the information in the enforcement agency case has been received from external law i.e. Sales Tax Department or from internal source i.e. Investigation Wing. In the case before us, the Ld. Assessing Officer has given a details finding as how search/survey was conducted in the case of ‘M/s Bigwin Paper Distributor Private Limited’ and ‘M/s Arun Paper and Iron Traders’ by the Investigation Wing of the Income Tax Department based on the information from the Sales Tax Authorities that those were engaged in accepting bogus purchase bills.
Thus it is clear that in the case of the assessee source of information is not Sales Tax Department and information is received only from the Investigation Wing of the Department, which is an internal source and not external law enforcement agencies as specified in exception 10(e) of the CBDT Letter.
The the appeals filed by the Revenue are dismissed, whereas cross objection raised by the assessee are allowed.Jurisdictional-Income-tax-Officer-Vs-Elphinstone-Paper-Box-Manufacturing-Co.-ITAT-Mumbai