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Judgment
PER BRAJESH KUMAR SINGH, AM,
This appeal by the Revenue is directed against the order of the National Faceless Appeal Centre (NFAC), Delhi, dated 31.01.2024 [hereinafter referred to as the ‘Ld. CIT(A)’] arising out of the assessment order dated 21.12.2022 passed under Section 143(3) r.w.s. 144B of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) by the Assessment Unit, Income Tax Department, (hereinafter referred to as the ‘Ld. AO’) pertaining to A.Y. 2021-22.
At the outset of hearing, the Ld. Counsel for the assessee submitted that the present appeal filed by the Revenue is not maintainable as the tax effect involved in the addition is below the monetary limit prescribed by the Central Board of Direct Taxes (CBDT) for filing appeals before the Tribunal. The Ld. Counsel furnished a computation of tax effect arising from the disputed addition of Rs.2,26,46,850/-, which is reproduced as under:
| S. No. | Total addition made | Tax rate (U/s 115BAA) | Total tax amount |
| 1. | 2,26,46,850/- | 22% | 57,00,212/- |
| 2. | Add: surcharge @ 10% | 10% | |
| 3. | Add: 4% health and education cess | 4% | |
| 4. | Effective rate | 25.17 |
The above tax effect was not disputed by the Ld. SR. DR and submitted that the tax effect as mentioned in column (4) at Form 36 filed by the Department was Rs. 56,99,760/-
We have heard both the parties and perused the material available on record. The grievance of the Revenue shows that the tax effect would be less than Rs.60 lacs, therefore, the present appeal filed by the Revenue is not admissible in the light of the CBDT Circular No. 05/2024 dated 15.03.2024 and Circular No. 09 of 2024 dated 17/09/2024. As per the said Circular, the Revenue shall not file an appeal before the Tribunal where the tax effect does not exceed Rs. 60 lakhs, and this appeal is not maintainable.
In the result, the appeal filed by the Revenue is dismissed on account of low tax effect. However, Revenue will be at liberty to approach Income Tax Appellate Tribunal U/s 254(2) of Income Tax Act, 1961 seeking recall of this order and, for restoration of this appeal if it is found that appeal of Revenue is covered by any of the exception as laid down in the aforesaid CBDT Circulars.