IN INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ITA Nos. 588 & 590/Ahd/2017 Assessment Year: 2006-07 & 2009-10 Assistant Commissioner of Vs. M/s. Nexus Software Ltd., Income-tax, 2, Suvarnpuri Society, Nava Circle 2(1)(2), Bazar, Karjan, Vadodara Baroda PAN : AAACN6794K (Appellant) (Respondent) Revenue by : Shri Vinod Tanwani, Sr DR Assessee by : Shri P F Jain, AR " Date of Hearing : 13/09/2019 Date of Pronouncement: 23/09/2019 ORDER PER RAJPAL YADAV, JUDICIAL MEMBER: present two appeals are directed at instance of assessee against consolidated order of learned CIT(A)-12, Ahmedabad dated 29.11.2016 passed in Assessment Years 2006-07 and 2009-10. 2. grounds taken by Revenue are as follows:- AY 2006-07 1. On facts and circumstances of case and in law Ld. C.I.T. (A) erred in holding that there is no material with AO enabling him to form bonafide belief of escapement of income in appellants hand and therefore resultant notice u/s. 148 on purported foundation is invalid in law without proper appreciation of reasons recorded for reopening of assessment wherein A.O. recorded finding to effect that " During course of post search proceedings, it was noticed that assessee group had introduced its unaccounted income in form of share capital premium through various fictitious shell companies and that assessee company had subscribed to ITA Nos. 588 & 590/Ahd/2017 ACIT vs. Nexus Software Ltd For AY: 2006-07 & 2009-10 2 share capital of Pradeep Overseas Ltd. and Pradeep Enterprise Ltd at premium". 2. On facts and circumstances of case and in law Ld. C.I.T. (A) erred in deleting addition of Rs. 1.09 crores without appreciating that assessee itself had admitted to have invested Rs. 1.09 crores for which assessee did not furnish any evidence regarding source of income for making investment of Rs. 1.09 crores and that assessee did not contend that it had not made investment in shares of Pradeep Enterprise Ltd and Pradeep Overseas Ltd. 3. On facts and circumstances of case and in law, Ld. C.I.T. (A) erred in deleting commission income of Rs. 93,895/- by holding that "In view of fact that reassessment proceedings themselves have been held to be bad in law and void ab initio in para no. 5.1, consequent addition would not survive, and therefore addition stands deleted", without appreciating that issue of commission income was not part and parcel of reasons recorded for reopening of assessment, and without commenting on A.O's finding on issue in assessment order. 4. On facts and circumstances of case and in law, Ld. C.I.T. (A) erred in quashing reassessment proceedings and deleting addition of Rs. 1.09 crores being investment in shares of Pradeep Overseas Ltd. and Pradeep Enterprise Ltd. and Commission income of Rs. 93,93,895/-, by relying on order of Hon'ble Income tax Settlement Commission Addl. Bench-II, Mumbai's order dated 07-11-2014 in S.A. No. GJ/AHCC-1/002/20I3-14/IT and GJ/AHDCC-1/003/2013-14/11 without appreciating that on date of reasons recorded for reopening of assessment and date of finalization of assessment, above referred of Hon'ble Income tax Settlement Commission was not in existence, and consequently pursuant to above referred order of Hon'ble Income tax Settlement Commission, Mumbai, Ld. C.I.T. (A) ought to have restored issue to file of A.O. for deciding issue afresh. AY 2009-10 1. On facts and circumstances of case and in law Ld. C.I.T. (A) erred in holding that there is no material with AO enabling him to form bonafide belief of escapement of income in appellants hand and therefore resultant notice u/s. 148 on purported foundation is invalid in law without proper appreciation of reasons recorded for reopening of assessment wherein A.O. recorded finding to effect that " During course of post search proceedings, it was noticed that assessee group had introduced its unaccounted income in form of share capital /premium through various ITA Nos. 588 & 590/Ahd/2017 ACIT vs. Nexus Software Ltd For AY: 2006-07 & 2009-10 3 fictitious shell companies and that assessee company had subscribed to share capital of Pradeep Overseas Ltd. and Pradeep Enterprise Ltd at premium". 2. On facts and circumstances of case and in law Ld. C.I.T. (A) erred in deleting addition of Rs.50 lacs without appreciating that assessee itself had admitted to have invested Rs. 50 lacs for which assessee did not furnish any evidence regarding source of income for making investment of Rs. 50 lacs and that assessee did not contend that it had not made investment in shares of Pradeep Enterprise Ltd and Pradeep Overseas Ltd. 3. On facts and circumstances of case and in law, Ld. C.I.T. (A) erred in quashing reassessment proceedings and deleting addition of Rs. 50 lacs being investment in shares of Pradeep Overseas Ltd. and Pradeep Enterprise Ltd. by relying on order of Hon'ble Income tax Settlement Commission Addl. Bench-II, Mumbai's order dated 07-11-2014 in S.A. No. GJ/AHCC-1/002/20I3-14/IT and GJ/AHDCC-1/003/2013-14/11 without appreciating that on date of reasons recorded for reopening of assessment and date of finalization of assessment, above referred of Hon'ble Income tax Settlement Commission was not in existence, and consequently pursuant to above referred order of Hon'ble Income tax Settlement Commission, Mumbai, Ld. C.I.T. (A) ought to have restored issue to file of A.O. for deciding issue afresh 3. When these appeals were called out for hearing, learned counsel for assessee submitted that these appeals of Revenue need to be dismissed on account of low tax effect in view of recent CBDT Circular No. 17 of 2019 dated 08.08.2019 whereby monetary limits for filing appeal by Revenue before Tribunal was enhanced from Rs.20 lakhs to Rs.50 lakhs. This instruction is applicable to pending cases also. Therefore, present appeals of Revenue are liable to be dismissed as non-maintainable as held by this Tribunal in case of ITO Vs. Dinesh Madhavlal Patel in ITA No.1398/Ahd/2004 for AY 1998-99 vide consolidated order dated 14.08.2019. ITA Nos. 588 & 590/Ahd/2017 ACIT vs. Nexus Software Ltd For AY: 2006-07 & 2009-10 4 4. learned Departmental Representative fairly admitted that tax effect involved in each appeal is less than limit prescribed by aforesaid CBDT Circular. 5. We have heard rival contentions, perused material on record and duly considered facts of case in light of applicable legal position. As learned counsel rightly contends, present appeals of Revenue are no longer maintainable in view of recent CBDT Circular No. 17 of 2019 dated 08.08.2019. mandatory limit for cases in which Revenue can challenge relief granted by CIT(A) now stands enhanced to Rs.50 lakhs. This concession granted by Central Board of Direct Taxes (CBDT) is retrospective in effect inasmuch as it applies to all pending appeals as well. In view of above position, appeals filed by Revenue are no longer maintainable and must be dismissed as such. 6. It is, however, made clear that on re-verification at end of Assessing Officer it comes out that tax effect of more than Rs.50 lakhs is being involved in appeal or appeal falls within exemption clause of Circular, then Revenue will be at liberty to file Miscellaneous Application to recall Tribunal order. application should be filed within time limit prescribed in Act. 7. In result, appeals of Revenue are dismissed due to low tax effect. Order pronounced in Court on 23rd September 2019 at Ahmedabad. Sd/- Sd/- (AMARJIT SINGH) (RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 23/09/2019 Biju T., Sr.PS ITA Nos. 588 & 590/Ahd/2017 ACIT vs. Nexus Software Ltd For AY: 2006-07 & 2009-10 5 Copy of Order forwarded to : 1. Appellant 2. Respondent. 3. Concerned CIT 4. CIT(A) 5. DR, ITAT, Ahmedabad 6. Guard file. BY ORDER, TRUE COPY (Dy./Asstt.Registrar) ITAT, Ahmedabad , 1. Date of dictation- 13.09.2019 .. 2. Date on which typed draft is placed before Dictating Member .13.09.2019 Other member 23.09.2019 . 3. Date on which approved draft comes to Sr.P.S./P.S. - 23.09.2019 . 4. Date on which fair order is placed before Dictating Member for Pronouncement 23.09.2019 5. Date on which file goes to Bench Clerk 23.09.2019 6. Date on which file goes to Head Clerk . 7. date on which file goes to Assistant Registrar for signature on order 8. Date of Despatch of Order Assistant Commissioner of Income-tax, Circle-2(1)(2), Baroda v. Nexus Software Ltd