This document provides a detailed analysis of the Income Tax Appellate Tribunal’s final decision on the case between DCIT, Circle-4(2), New Delhi and CSV Techno Services Pvt. Ltd., New Delhi, concerning the assessment year 2018-19. The case number is ITA 2581/DEL/2022, presided over by Hon’ble President Shri G.S. Pannu and Judicial Member Shri Saktijit Dey.
The appeal filed by the Revenue challenged the order dated 30.08.2022, passed by the National Faceless Appeal Centre (NFAC), Delhi. The case was filed on 2022-10-21, and the final order was pronounced on 2023-05-29. The main issue in this case was the disallowance related to the delayed payment of employees’ contributions to Provident Fund (PF) and Employees State Insurance (ESI).
During the hearing on 18.05.2023, the Revenue was represented by Sh. Pramod Kumar, Sr. DR. No one appeared on behalf of the assessee, CSV Techno Services Pvt. Ltd., despite notice of hearing issued through postal department. Therefore, the Tribunal proceeded to dispose of the appeal ex parte qua the assessee after hearing the learned Departmental Representative and based on materials on record.
The Revenue raised grounds in column no. 10 of the appeal, disputing the quantum of addition to the tune of Rs.4,49,191/- representing delayed payment of employees’ contributions to PF and ESI. According to the Revenue’s own computation, the tax effect on the amount disputed by the Revenue works out to Rs.1,52,680/-.
The Tribunal noted that the tax effect on the amount disputed by the Revenue in the present appeal is below the threshold limit of Rs.50 lakhs for maintaining an appeal before the Tribunal, as per Circular No. 17 of 2019, dated 8th August 2019, issued by the Central Board of Direct Taxes (CBDT).
The Tribunal observed that the Revenue failed to demonstrate that the appeal is protected by any of the exceptions to the extant circular issued by the CBDT. Consequently, the Tribunal found that the present appeal is not maintainable under the stipulated guidelines.
The Tribunal concluded that the appeal filed by the Revenue should be dismissed due to the tax effect being below the threshold limit prescribed by the CBDT. The order stated:
Order pronounced in the open court on 29th May, 2023.
(G.S. PANNU)
PRESIDENT
(SAKTIJIT DEY)
JUDICIAL MEMBER
This case highlights the importance of adhering to the threshold limits set by the CBDT for maintaining appeals before the Tribunal. It underscores the necessity for the Revenue to ensure that appeals meet the required criteria, failing which they may be dismissed as non-maintainable.
The appellant, DCIT, Circle-4(2), New Delhi, challenged the order passed by the NFAC, Delhi, concerning the delayed payment of employees’ contributions to PF and ESI by the respondent, CSV Techno Services Pvt. Ltd., New Delhi. The disputed amount was Rs.4,49,191/-, with a tax effect of Rs.1,52,680/-.
The Revenue argued that the delayed payment of employees’ contributions to PF and ESI should be added back to the income of the assessee. The Revenue’s computation indicated that the tax effect was below the threshold limit for maintaining an appeal before the Tribunal.
The Tribunal noted that no representative appeared on behalf of the assessee despite proper notice. Hence, the appeal was considered ex parte.
The Tribunal observed that the tax effect on the disputed amount was below the threshold limit of Rs.50 lakhs, as per the CBDT’s Circular No. 17 of 2019. The Tribunal emphasized the importance of adhering to the guidelines set forth by the CBDT for maintaining appeals.
The Tribunal’s decision in the case of DCIT, Circle-4(2), New Delhi vs CSV Techno Services Pvt. Ltd., New Delhi, reaffirms the necessity for the Revenue to comply with the CBDT’s guidelines on the threshold limits for tax effects in appeals. The dismissal of the appeal underscores the importance of ensuring that appeals meet the required criteria to be maintainable before the Tribunal.
Manage the increasing number of hearings effortlessly by leveraging the legal AI revolution We are India's Leading revolutionary AI-powered legal platform where you can get enough insights into top cases and judgements.
Research Platform