If the tax effect as per the computation form provided by AO is below Rs. 60 lakhs, the appeal is liable to be dismissed on the ground of low tax effect: Delhi ITAT
Delhi ITAT recently in a case before it has held that if the tax effect as per the computation form provided by AO is below Rs. 60 lakhs, the appeal is liable to be dismissed on the ground of low tax effect.
The case detail is as under:
DCIT v. Krishna Kirpa Computer Industries (P.) Ltd.
[2025] 172 taxmann.com 810 (Delhi – Trib.)
Let us have a Short Overview of the case:
The Department had preferred an appeal against the order passed by the learned CIT (Appeals). The primary issue pertained to the classification of income, where the learned Assessing Officer (AO) had assessed the income under the head “Income from House Property” as opposed to “Profits and Gains of Business or Profession,” as originally reported in the Income Tax Return.
During the course of representation, the first argument raised was regarding the low tax effect, as per the monetary limits prescribed for departmental appeals before the Hon’ble ITAT. Reference was made to CBDT Circular No. 09/2024, dated 17.09.2024, which prescribes a monetary threshold of INR 60 lakhs for the Department to file an appeal before the ITAT.
Although the Revenue contended-based on Form No. 36-that the total tax effect amounted to INR 98.57 lakhs, it was submitted during arguments that the Income Tax Computation Form, provided along with the assessment order, clearly reflected a tax effect of less than INR 60 lakhs. After a detailed representation, the Revenue acknowledged that the tax effect, as per the computation form, indeed fell below the monetary threshold.
The Hon’ble Tribunal accepted the submission that in cases where the tax effect involved in the appeal-as per the computation form provided to the assessee along with the assessment order-is below INR 60 lakhs, the appeal is liable to be dismissed on the ground of low tax effect. Accordingly, the department appeal was dismissed in line with Circular No. 09/2024.
Though the matter was disposed of after six years, it sets an important precedent: where there is a discrepancy between the tax effect stated in Form 36 and that reflected in the income tax official computation form, priority must be given to the latter.
The copy of the order is as under:
