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TMI Blog2023 (2) TMI 1124X X X X Extracts X X X X X X X X Extracts X X X X ..... /- making addition under 4 different heads total amounting to Rs. 1,99,25,726/-, inter alia, disallowance of "Retention Money Deposit & Security Deposit" amounting to Rs. 1,07,35,595/-. Being aggrieved, Assessee filed an appeal before CIT(A). On 04.10.2016, the CIT(A) allowed the appeal on other additions and dismissed the appeal filed by the Assessee on disallowance of "Retention Money deposit & Security Deposit" amounting to Rs. 1,07,35,595/-. Thereafter, the Respondent-Assessee filed appeal before the learned ITAT. The learned ITAT vide its common order dated 20.01.2020 allowed the appeal of the Assessee and the aforesaid disallowance of Expenditure of Rs. 1,07,35,595/- on account of Security Deposit, Retention Money deposit etc. was deleted. On 04.09.2020, instant tax Appeal No.34 of 2020 has been filed by the Revenue before this Court against the deletion of aforesaid amount of Rs. 1,07,35,595/- on account of Security Deposit, Retention Money deposit etc. 3. 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 m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -11 was reopened by the CIT, Ranchi on the ground of "Security Deposit & other deduction charged in the P & L account as an expenses and as an income in the P & L account." No order u/s 263 was passed for the year under consideration. Thereafter, learned counsel for the appellant further filed 3rd supplementary affidavit on 14.02.2023 annexing therewith the photocopy of Central Scrutiny Report prepared by the Income Tax Department for filing Appeal u/s 260A of the Income Tax Act before this Hon'ble High Court wherein it has been mentioned by the Pr. Commissioner of Income Tax, Ranchi in the background of the case that "At the instance of objection raised by the Audit Team, the accessing officer accepted the same and submitted a proposal for action u/s 263 of the I.T. Act. The Pr. CIT, Ranchi passed an order dated 09.01.2015 u/s 263 of the I.T. Act thereby setting-aside the original assessment order passed by the AO for passing denovo assessment on the ground of Retention Money Deposit and Security Deposit debited in the Profit and Loss Account." 4. Mr. R. N. Sahay, Sr. standing counsel for the revenue submits that though for the Audit objection was raised for the three years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal filed by the revenue comes under the exception clause as enumerated in circular no. 3/2018 dated 11.07.2018" 7. Having heard learned counsel for the parties and after going through the documents available on record and the different circulars whereby monetary limit for filing appeal under 260A of the Income Tax Act, 1961 has been fixed; it appears that in exercise of powers conferred under section 268A of the Income Tax Act, 1961, the Central Board of Direct Taxes (CBDT), vide its Circular No.3/2018 dated 11.07.2018 read with Circular No. 17/2019 [F. No.279/MISC. 142/2007- ITJ (PT.)], dated 08.08.2019 has fixed a monetary limit of tax effect of Rs.1,00,00,000/- for filing appeal u/s 260A of the Act by the Income tax department before the High Courts. 8. It is relevant to note here that we have in Tax Appeal No. 32 of 2020 between the same appellant and respondent for the Assessment year 2010-11, vide our Order No. 12 dated 14.02.2023 have held at paragraph Nos. 9 to 11 as under :- "4. Clause (C) of para 10 of the aforesaid Circular No.3/2018 dated 11.07.2018 (Annexure-A) specifically provides that adverse judgment shouldbe contested on merits notwithstanding with tax effec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Annexure-1) it would transpire that the assessment order in the instant appeal has been passed since an order u/s 263 dated 09.01.2015 was passed by the Commissioner of Income Tax, Ranchi setting aside the original Assessment Order passed earlier by the AO, on the grounds mentioned in the said Annexure-1. It is no where mentioned that the said Assessment Order u/s 143(3) read with Section 263 (Annexure-1) was passed due to any audit objection having been accepted by the department. On the contrary, the letter as contained in Annexure-3 annexed with the supplementary affidavit under reply, shows that the audit objection raised by the revenue audit against the Original Assessment Order was not accepted by the Assessing Officer. As a matter of fact, there is no mention of any Audit Objection in any of the orders and/or communication issued by the department to the Respondent assessee and /or brought to the notice of ITAT by the department at the time of hearing before it which took place on 07.11.2019 as mentioned in the ITAT order itself at page 32 of the memo of appeal. Further the instant memo of appeal was filed by the department on 26.08.2020 wherein also nothing has been menti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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