2016 (6) TMI 1297 - AT - Income Tax

Maintainability of appeal - monetary limit - retrospective effect of circular - Held that - From Clause 10 of circular No.21 of 2015 dated 10.12.2015, it is clear that these instructions are applicable to the pending appeals also and as per clause 3, there is clear cut instruction to the department to withdraw or not to press the appeals filed before the ITAT wherein tax effect is less than ₹ 10,00,000/-. These instructions are operative retrospectively to the pending appeals. Keeping in view the CBDT Circular No.21 of 2015 dated 10.12.2015 and also the provisions of Section 268A of Income Tax Act, 1961, we are of the view that the Revenue should not have filed the instant appeal before the Tribunal.

Summary

Issues:
Appeals filed by the department with tax effect less than ?10,00,000 - Applicability of Circular No. 21/2015 and Section 268A of the Income Tax Act, 1961.

Analysis:
The appeals were against separate orders of the ld. CIT(A)- XXVIII, New Delhi, and the tax effect in each appeal was less than ?10,00,000. The counsel for the assessee pointed out the Circular No. 21/2015 issued by the CBDT and Section 268A of the Income Tax Act, 1961, which provide monetary limits for not filing appeals before the Tribunal. The CBDT circular revised the monetary limit to ?10,00,000 for not filing appeals before the Tribunal. The circular clarified that appeals should not be filed solely based on exceeding the monetary limits, and the decision should be based on the merits of the case.

Considering the submissions and the legal provisions, it was noted that Section 268A was inserted with retrospective effect and authorized the Board to issue instructions fixing monetary limits for filing appeals. The CBDT Circular No. 21 of 2015 set the monetary limit at ?10,00,000 for appeals before the Tribunal. The circular applied to pending appeals as well, directing the department to withdraw or not press appeals where the tax effect is less than ?10,00,000. The Tribunal, in line with the circular and statutory provisions, concluded that the Revenue should not have filed the instant appeal before the Tribunal.

Thus, without delving into the merits of the case, the Tribunal dismissed the appeals filed by the department. The instruction from the CBDT applied retrospectively to pending appeals, and the decision was made in accordance with the Circular No. 21/2015 and Section 268A of the Income Tax Act, 1961. The appeals of the department were consequently dismissed.