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2014 (10) TMI 433 - AT - Income TaxMaintainability of appeal Tax effect less than ₹ 4 lacs whether, this appeal of revenue, which is below the prescribed limit of tax effect in view of the Board s Instruction No.5/2014 issued on 10.07.2014 revising the monetary limits for filing of appeals by the Department before ITAT is maintainable or not Held that - As decided in CIT Vs M/s. P. S. Jain & Co. 2010 (8) TMI 702 - Delhi High Court - the Board has rightly taken a decision not to file references if the tax effect less than the amount prescribed - The same policy for old matters needs to be adopted by the Department also in The Commissioner of Income Tax v. Smt. Vijaya V. Kavekar 2013 (2) TMI 451 - Bombay High Court the applicability of circular was considered and the monetary limit was increased and appeals were to be filed only in cases where the tax effect exceeded ₹ 4 Lacs - no appeals would be filed in the cases involving tax effect less than ₹ 4 Lacs notwithstanding the issue being of recurring nature - the prevailing instructions fixing the monetary limit for the tax effect would hold good even for pending cases revenue could not point out any of the exceptions - this being a low tax effect case, the appeal cannot be admitted Decided against revenue.
Issues Involved:
1. Tax effect below prescribed monetary limits. 2. Applicability of CBDT Instruction No. 5/2014 to pending appeals filed before its issuance. Detailed Analysis: 1. Tax Effect Below Prescribed Monetary Limits: The primary issue in this case is whether the appeal by the revenue is maintainable given that the tax effect is below the prescribed monetary limits for filing appeals before the ITAT. The appeal involves a quantum addition of Rs. 11,77,374/- with a tax effect of Rs. 3,96,256/-, which is below the Rs. 4 lakh threshold set by the CBDT Instruction No. 5/2014 dated 10.07.2014. The counsel for the assessee argued that the appeal should be dismissed as it does not meet the monetary limit requirements. The revenue's representative contended that the instruction should only apply to appeals filed on or after 10.07.2014, not retrospectively. 2. Applicability of CBDT Instruction No. 5/2014 to Pending Appeals: The tribunal considered various judicial precedents to determine whether the CBDT Instruction No. 5/2014, which prescribes monetary limits for filing appeals, applies to pending cases. The Hon'ble Delhi High Court in CIT Vs M/s. P. S. Jain & Co. (ITA No.179/1991) emphasized the need to adopt the Board's circulars to reduce the burden of litigation on the department and the courts, even for old references with minimal tax impact. Similarly, the Hon'ble Gujarat High Court in CIT v. Sureshchandra Durgaprasad Khatod (HUF) (253 CTR 492) held that such instructions apply to pending cases to reduce litigation where the tax effect is minimal. The tribunal noted that the consistent view across various High Courts is that CBDT instructions aimed at reducing litigation should apply to pending cases as well. This is to ensure that the department does not pursue appeals with negligible tax effects, thereby reducing the burden on the judicial system. The tribunal also referenced the Karnataka High Court's decision in The Commissioner of Income-Tax vs. M/s. Ranka & Ranka (ITA No.3191 of 2005), which supported the applicability of such instructions to pending appeals. Conclusion: The tribunal concluded that the CBDT Instruction No. 5/2014, which revises the monetary limit for filing appeals to Rs. 4 lakh before the ITAT, applies to pending appeals as well. The revenue's appeal, having a tax effect below this limit, is not maintainable. The tribunal dismissed the appeal in limine without examining the merits, as none of the exceptions outlined in the circular were applicable to this case. Order: The appeal by the revenue is dismissed due to the tax effect being below the prescribed monetary limit. The order was pronounced in open court on 09.09.2014.
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