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2014 (11) TMI 64 - AT - Income TaxMaintainability of appeal Tax effect less than prescribed monetary limit for filing appeal Tax effect less than ₹ 4 lacs Revision of monetary limits through circular - Held that - Following the decision 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 - Instruction No.5/2014 FNo279/Misc.142/2007-ITJ(Pt) dated 10th July, 2014 will apply to pending appeals also for the reason that the same is exactly identical to earlier instructions - also in The Commissioner of Income Tax v. Smt. Vijaya V. Kavekar 2013 (2) TMI 451 - Bombay High Court it has been held that 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. Whether the appeal of the revenue is maintainable given the tax effect is below the prescribed monetary limit as per CBDT Instruction No. 5/2014. Detailed Analysis: Issue 1: Maintainability of the Appeal Based on Tax Effect The primary issue in this case was whether the appeal filed by the revenue is maintainable given that the tax effect is below the prescribed monetary limit as set by the Central Board of Direct Taxes (CBDT) Instruction No. 5/2014, dated 10.07.2014. The appeal in question involved a tax effect of Rs. 3,44,450, which is below the Rs. 4 lakh threshold specified for filing appeals before the Income Tax Appellate Tribunal (ITAT). The respondent's counsel argued that the appeal should be dismissed in limine based on the monetary limits prescribed in the recent CBDT instruction. Conversely, the Senior Departmental Representative (DR) contended that the instruction is prospective and applies only to appeals filed on or after 10.07.2014, not to those filed prior. The tribunal considered the judgments of various High Courts, including the Hon'ble Delhi High Court in the case of CIT Vs M/s. P. S. Jain & Co., and the Hon'ble Gujarat High Court in CIT v. Sureshchandra Durgaprasad Khatod (HUF). These judgments supported the view that the CBDT instructions on monetary limits apply to pending cases as well, even if the appeals were filed before the issuance of the instruction. The courts emphasized that the main objective of such instructions is to reduce pending litigation where the tax effect is minimal. The tribunal also referred to the CBDT Instruction No. 5/2014, which explicitly states that appeals shall not be filed where the tax effect does not exceed Rs. 4 lakh before the ITAT. The instruction aims to reduce the burden on the Department and the judiciary by avoiding litigation in cases with negligible tax effects. The tribunal noted that the Department could not point out any exceptions under the circular that would justify the continuation of the appeal. Specifically, the Department did not demonstrate that the case involved: - A loss case with a tax effect exceeding the prescribed limit. - A composite order for multiple assessment years with a cumulative tax effect exceeding the limit. - Challenges to the constitutional validity of the provisions of the Act or IT Rules. - Any Board's order, Notification, Instruction, or Circular being held illegal or ultra vires. - Revenue Audit Objection accepted by the Department. Given the absence of any such exceptions, the tribunal concluded that the appeal is not maintainable due to the low tax effect. Consequently, the appeal was dismissed in limine without delving into the merits of the case. Conclusion: The tribunal dismissed the revenue's appeal based on the CBDT Instruction No. 5/2014, which sets a monetary limit for filing appeals. The tribunal upheld the principle that such instructions apply to pending cases to reduce unnecessary litigation where the tax effect is minimal. The decision aligns with the broader judicial consensus on the applicability of CBDT instructions to both prospective and retrospective cases.
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