2015 (12) TMI 1726 - AT - Income Tax

Maintainability of appeal - monetary limit - tax effect - Held that - In the present case, tax effect on account of the relief granted by the CIT(A) which led to the filing of the present appeal by the Revenue, is admittedly, less than ₹ 10 lakhs. In the light of the circular dated 10.12.2015, issued by the CBDT in exercise of the powers conferred in it by subsection (1) of S.268A, we are of the view that the appeal filed herein should not have been pressed by the Revenue. The Learned Departmental Representative fairly admitted that the Revenue effect in this appeal is less than the limit prescribed in para-3 of the above circular issued by the CBDT. Having regard to the circumstances of the case, we dismiss the appeal of the Revenue as withdrawn/not pressed

Summary

Issues:
1. Interpretation of Circular No.21/2015 dated 10th December, 2015 regarding monetary limits for filing appeals by the Revenue.
2. Application of S.268A of the Income Tax Act, 1961 in regulating the filing of appeals.

Analysis:

1. The judgment revolves around the interpretation of Circular No.21/2015 issued by the CBDT, which revised monetary limits for filing appeals by the Department before various tax authorities. The circular specified that appeals need not be pursued if the tax effect is below the prescribed limit, even for pending appeals. The Tribunal emphasized that the tax effect needs to be calculated separately for each assessment year and appeals can only be filed for years where the tax effect exceeds the specified limit. However, an exception was made for combined orders where if the tax effect in one year exceeds the limit, appeals for other years covered by the order can be filed, even if individually they fall below the limit. The judgment highlighted that dismissal of an appeal for lack of tax effect does not prevent the Department from filing appeals for other years or issues.

2. The Tribunal also discussed the legislative provision of S.268A of the Income Tax Act, 1961, empowering the Board to set monetary limits for regulating appeal filings. In light of the circular issued by the CBDT, the Tribunal concluded that the appeal in question, where the tax effect was below the prescribed limit, should not have been pursued by the Revenue. The Departmental Representative acknowledged that the tax effect in this appeal fell below the limit specified in the circular. Consequently, the Tribunal dismissed the appeal of the Revenue as withdrawn or not pressed, in accordance with the powers conferred by S.268A and the circular issued by the CBDT.

This judgment underscores the importance of adhering to the monetary limits set by the CBDT for filing appeals, ensuring efficient use of resources and reducing unnecessary litigation. It clarifies the approach to be taken when the tax effect is below the specified limit, emphasizing the need for proper assessment and calculation of tax implications for each year and issue before deciding on appeal filings. The Tribunal's decision reflects a strict adherence to the guidelines provided by the legislative framework and administrative directives, promoting a more streamlined and effective appeal process in tax matters.