Pr. Commissioner Of Income Tax-7 vs. M/S Rajdhani Realcon P. LTD.
Held
The Court held that the appeal was not maintainable due to the low tax effect. The primary reason for this decision was that the assessment order in the present case was dated March 16, 2016, while the SFIO report, which the Revenue sought to rely on as an external source of information, was dated March 31, 2016. Consequently, the addition made in the assessment could not have been based on the SFIO report. The Court found that the exception mentioned in paragraph 10(e) of Circular No. 3/2018, which allows appeals despite low tax effect when additions are based on information from law enforcement agencies like SFIO, was not attracted to the facts of this case. Therefore, the appeal was dismissed on the ground of low tax effect, and the Court explicitly stated that it had not expressed any opinion on the merits of the controversy.
Facts
The Revenue appealed against an order concerning M/s Rajdhani Realcon P. Ltd. The respondent-assessee argued that the appeal was not maintainable due to low tax effect, citing Rs. 3,86,250/- as the tax effect and referring to an exception in Circular No. 3/2018 regarding information from law enforcement agencies like SFIO. The Revenue, through Mr. Zoheb Hossain, submitted a letter indicating that the respondent was named in an SFIO report, suggesting the exception applied. The respondent countered by pointing to the assessment order dated March 16, 2016, which stated that proceedings were initiated based on information from DIT (Inv.) and that the assessee did not respond to notices. The respondent argued that the addition was not based on SFIO information.
Key Issues
1. Whether the appeal filed by the Revenue is maintainable given the tax effect of Rs. 3,86,250/-, considering the exception provided in paragraph 10(e) of Circular No. 3/2018, which pertains to additions based on information received from external sources like SFIO? Contentions: Petitioner/Revenue: The appeal is maintainable because the addition was based on information received from the SFIO, as evidenced by the SFIO report dated March 31, 2016, and the respondent being named as a beneficiary. This falls under the exception in paragraph 10(e) of Circular No. 3/2018, allowing appeals despite low tax effect. Respondent/Assessee: The appeal is not maintainable due to the low tax effect. The assessment order dated March 16, 2016, indicates that the proceedings were initiated based on information from DIT (Inv.) and not from the SFIO report, which was dated later. Therefore, the exception in paragraph 10(e) of the circular is not applicable.
Sections Cited
Section 148, Section 142(1), Section 271(1)(b), Section 144
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Cause title — parties, addresses and appearances
O R D E R
On the last date of hearing, learned counsel for the respondent had stated that the present appeal was not maintainable due to low tax effect. In support of his contention, he had referred to the note at the end of the list of dates. The same is reproduced hereinbelow:
“Tax Effect Rs. 3,86,250/- [Exception mentioned in para 10(e) of Circular No.3/2018 as amended vide F.No.279/Misc. 142/2007- ITJ(Pt.) dated 20.08.2018 is applicable to the facts and circumstances of the present case, since the name of the assessee is reflected under the beneficiary list in the SFIO report disseminated to the department.]
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