2016 (4) TMI 1289 - HC - Income Tax

Maintainability of appeal - monitory limit - Held that - From Circular No.21 of 2015 the respondent/assessee submitted that pending appeals before the High Court, below the specified tax limits as stated in paragraph 3 of the Circular, are liable to be withdrawn/not pressed. It is appropriate to notice that the Central Board of Direct Taxes has issued the instructions contained in the said Circular in exercise of its power available to it under Section 268-A(i) of the Income Tax Act,1961 and hence, the Circular has statutorily enforceable character. In that view of the matter, we treat this appeal as not pressed and dismiss it as such. However, it goes without saying that the questions of law raised in this appeal for consideration of this Court in this appeal, are kept open to be decided on merits in an appropriate case

Summary

Issues:
1. Preliminary objection regarding sustainability of the Tax Case Appeal based on Circular No.21 of 2015.
2. Interpretation and applicability of the monetary limits set out in the Circular.
3. Decision on whether the appeal should be withdrawn or not pressed based on the Circular's instructions.
4. Legal enforceability of Circular No.21 of 2015 under Section 268-A(i) of the Income Tax Act, 1961.

Issue 1:
The Tax Case Appeal was challenged by the respondent based on a preliminary objection concerning the sustainability of the appeal. The objection was raised in light of Circular No.21 of 2015 issued by the Central Board of Direct Taxes, which outlined revised monetary limits for filing appeals before the Income Tax Appellate Tribunal, High Courts, and the Supreme Court. The respondent contended that the appeal should be dismissed as it did not meet the specified tax limit set in the Circular.

Issue 2:
The Circular specified monetary limits for appeals in income tax matters, with different thresholds for Appellate Tribunals, High Courts, and the Supreme Court. The Circular emphasized that appeals should not be filed solely based on exceeding the monetary limits but should be decided on the merits of the case. In this case, the total tax effect was below the limit set for appeals before the High Court, leading to the argument that the appeal should be withdrawn or not pressed as per the Circular's instructions.

Issue 3:
The Standing Counsel for the appellant/Revenue acknowledged the Circular's instructions but stated that no written instructions had been received from the Department to withdraw the appeal. Despite this, the Court, recognizing the statutory enforceability of the Circular under Section 268-A(i) of the Income Tax Act, treated the appeal as not pressed and dismissed it accordingly. The Court clarified that the questions of law raised in the appeal could be considered in a future case.

Issue 4:
The Court emphasized the statutory enforceability of Circular No.21 of 2015, issued by the Central Board of Direct Taxes under Section 268-A(i) of the Income Tax Act, 1961. By exercising its power, the Board provided instructions regarding the filing of appeals based on monetary limits, aiming to reduce unproductive litigations. The Court's decision to dismiss the appeal as not pressed was in alignment with the Circular's provisions, while keeping the legal questions open for future consideration.