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2014 (12) TMI 756 - 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. Applicability of CBDT Instruction No. 5/2014 regarding monetary limits for filing appeals. 2. Retrospective vs. prospective application of CBDT instructions. 3. Exceptions to the monetary limit instructions. Detailed Analysis: 1. Applicability of CBDT Instruction No. 5/2014 regarding monetary limits for filing appeals: The primary issue in this case revolves around whether the appeal filed by the Revenue is maintainable given the tax effect is below the prescribed monetary limits set by CBDT Instruction No. 5/2014. The instruction, issued on 10.07.2014, revises the monetary limits for filing appeals before the ITAT, High Courts, and the Supreme Court, setting a limit of Rs. 4 lakhs for the ITAT. The Ld. Counsel for the assessee argued that based on this instruction, the appeal should be dismissed as the tax effect is below Rs. 4 lakhs. 2. Retrospective vs. prospective application of CBDT instructions: The Revenue's representative argued that the instruction should apply prospectively, i.e., only to appeals filed on or after 10.07.2014, and not to those filed before this date. However, the Tribunal referred to several High Court judgments, including the Hon'ble Delhi High Court in CIT Vs M/s. P. S. Jain & Co., which held that such instructions should apply retrospectively to reduce the burden of litigation. Similarly, the Hon'ble Gujarat High Court in CIT v. Sureshchandra Durgaprasad Khatod (HUF) and the Karnataka High Court in The Commissioner of Income-Tax vs. M/s. Ranka & Ranka have held that these instructions apply to pending cases as well, emphasizing the objective of reducing pending litigation with minimal tax effect. 3. Exceptions to the monetary limit instructions: The Tribunal examined whether any exceptions to the monetary limit instructions applied in this case. The CIT-DR was unable to point out any exceptions such as: - Loss cases with tax effect exceeding the prescribed limit. - Composite orders involving multiple assessment years with cumulative tax effect above the limit. - Cases challenging the constitutional validity of the Act or Rules. - Cases where a Board's order, Notification, Instruction, or Circular was held illegal or ultra vires. - Cases involving accepted Revenue Audit Objections. Since none of these exceptions were applicable, the Tribunal concluded that the appeal was not maintainable due to the low tax effect. Conclusion: The Tribunal, after considering the facts and circumstances, and in light of the judgments from various High Courts, dismissed the appeal of the Revenue in limine without delving into the merits of the case. The decision was based on the application of CBDT Instruction No. 5/2014, which aims to reduce the burden of litigation by setting monetary limits for filing appeals. The Tribunal emphasized that the instruction applies retrospectively to pending cases, aligning with the broader judicial consensus. The order was pronounced in open court on 18.12.2014.
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