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2015 (1) TMI 1007 - AT - Income TaxPrescribed monetary limits for filing of appeal before ITAT - 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 - On query from the Bench, the Ld. DR could not point out any of the exceptions as provided in the Circular as that this is a loss case having tax effect more than the prescribed limit, which should be taken into account,or that this is a composite order for many assessment years where tax effect will be more than the prescribed limit as per para 5 of above instructions, or that this is a case, where, in the case of revenue, where constitutional validity of the provision of the Act or I.T. Rules 1962 are under challenge,or that Board s order, Notification, Instruction or Circular has been held to be illegal or ultra vires, or that Revenue Audit Objection in the case has been accepted by the Department and the same is under challenge. The Ld. DR could not point out any of the exceptions as provided above. Accordingly, this being a low tax effect case, the appeal of the revenue dismissed in limine without going into merits. - Decided against revenue.
Issues Involved:
1. Maintainability of the appeal considering the monetary limits prescribed by CBDT Instruction No. 5/2014. 2. Retrospective application of CBDT instructions to pending appeals. Issue-wise Detailed Analysis: 1. Maintainability of the appeal considering the monetary limits prescribed by CBDT Instruction No. 5/2014: The primary issue is whether the Revenue's appeal is maintainable given that the tax effect is below the monetary limits prescribed by the CBDT Instruction No. 5/2014, which sets a threshold of Rs. 4 lakhs for filing appeals before the ITAT. The counsel for the assessee argued that the appeal should be dismissed in limine as it does not meet the prescribed monetary threshold. The Revenue's representative contended that the instruction is prospective and applies only to appeals filed on or after 10.07.2014. 2. Retrospective application of CBDT instructions to pending appeals: The Tribunal examined the applicability of the CBDT instructions to pending appeals. It referred to several judgments from various High Courts, including the Delhi High Court in CIT Vs M/s. P. S. Jain & Co. and the Gujarat High Court in CIT v. Sureshchandra Durgaprasad Khatod (HUF). These judgments held that the instructions should be applied retrospectively to reduce the burden of litigation on the courts and the Department. The Tribunal noted that the main objective of such instructions is to reduce pending litigation where the tax effect is minimal. The Tribunal also referenced the Bombay High Court's decision in Commissioner of Income Tax v. Smt. Vijaya V. Kavekar, which interpreted similar instructions and concluded that they apply to both prospective and retrospective cases. The Karnataka High Court in The Commissioner of Income-Tax vs. M/s. Ranka & Ranka also supported this view, emphasizing the National Litigation Policy's aim to reduce litigation. The Tribunal concluded that the recent instruction revising the monetary limit to Rs. 4 lakh for filing appeals before the ITAT applies to pending appeals as well. This conclusion is based on the consistent view of various High Courts that the instructions are meant to reduce the litigation burden by dismissing cases with negligible tax effects. Conclusion: The Tribunal found no exceptions to the application of the CBDT instructions in the present case. The Revenue could not demonstrate any special circumstances that would warrant the appeal's maintainability despite the low tax effect. Consequently, the Tribunal dismissed the appeal in limine without addressing the merits, adhering to the monetary limits set by the CBDT Instruction No. 5/2014. Order: The appeal filed by the Revenue is dismissed. The order was pronounced in the open Court on 13th January 2015.
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