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2015 (1) TMI 1114 - 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. Applicability of CBDT Instruction No. 5/2014 regarding monetary limits for filing appeals. 2. Whether the appeal filed by the Revenue is maintainable given the tax effect is below the prescribed limit. Detailed Analysis: 1. Applicability of CBDT Instruction No. 5/2014 Regarding Monetary Limits for Filing Appeals: The primary issue is whether the appeal filed by the Revenue is maintainable under the revised monetary limits set by CBDT Instruction No. 5/2014, which prescribes a tax effect limit of Rs. 4 lakhs for filing appeals before the ITAT. The appeal in question concerns a penalty amount of Rs. 22,144 for the assessment year 2006-07, which is below this limit. The counsel for the assessee argued that the appeal is not maintainable due to the recent instruction revising the monetary limits for filing appeals. Conversely, the Senior Departmental Representative (DR) contended that the instruction applies only to appeals filed on or after 10.07.2014 and not to those filed prior to this date. 2. Whether the Appeal Filed by the Revenue is Maintainable Given the Tax Effect is Below the Prescribed Limit: The Tribunal examined precedents from various High Courts to determine the applicability of the revised monetary limits to pending cases. Notably, the Hon'ble Delhi High Court in CIT Vs M/s. P. S. Jain & Co. and the Hon'ble Gujarat High Court in CIT v. Sureshchandra Durgaprasad Khatod (HUF) have held that such instructions apply retrospectively to pending cases. These courts emphasized that the main objective of these instructions is to reduce the burden of litigation where the tax effect is minimal. The Tribunal also considered the case law from the Karnataka High Court in The Commissioner of Income-Tax vs. M/s. Ranka & Ranka, which supported the view that the instructions are applicable to pending appeals to reduce litigation where the tax effect is low. Based on these precedents, the Tribunal concluded that the revised monetary limit of Rs. 4 lakhs for filing appeals before the ITAT, as per Instruction No. 5/2014, applies to pending cases as well. The Tribunal noted that the Revenue could not point out any exceptions to this rule, such as cases involving constitutional validity challenges or significant tax effects across multiple years. Conclusion: The Tribunal dismissed the appeal filed by the Revenue in limine due to the low tax effect, which is below the prescribed limit of Rs. 4 lakhs as per the CBDT Instruction No. 5/2014. The appeal was dismissed without going into the merits of the case. Final Order: The appeal filed by the Revenue is dismissed. Order pronounced in the open Court on 27.11.2014.
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