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2015 (7) TMI 697 - AT - Income TaxMonetary limit to prefer an appeal - 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 learned Standing Counsel for the Revenue is not disputing the fact that the tax effect in the present case is less than ₹ 4 Lakhs and that the assessee s case does not fall within the exceptions specified in Instruction No.1979, dated 27.3.2000. Thus appeals are dismissed as not maintainable. - 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. Analysis: 1. Applicability of CBDT Instruction No. 5/2014: The primary issue was whether the CBDT Instruction No. 5/2014, which revises the monetary limits for filing appeals, applies to appeals filed before its issuance. The Ld. Counsel for the assessee argued that the appeal is not maintainable as the tax effect is below Rs. 4 lakhs, in line with the new instruction. The Ld. SR-DR contended that the instruction is prospective and not retrospective, thus should not apply to appeals filed before 10.07.2014. 2. Maintainability of the Appeal: The Tribunal examined the facts and rival submissions, referencing several High Court judgments to determine the applicability of the CBDT instructions to pending cases. 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) were cited, both supporting the view that monetary limit instructions apply to pending cases to reduce litigation burden. The Tribunal noted that the Hon'ble Gujarat High Court had explicitly stated that instructions similar to Instruction No. 5/2014 should apply retrospectively to pending appeals, emphasizing the objective of reducing the backlog of cases with minimal tax effect. The Tribunal also referred to the CBDT's Instruction No. 3/2011, which had a similar clause and was interpreted by various courts, including the Bombay High Court in Commissioner of Income Tax v. Smt. Vijaya V. Kavekar, to apply to pending cases. The Karnataka High Court in The Commissioner of Income-Tax vs. M/s. Ranka & Ranka also supported this view, stating that the new monetary limits should apply to pending appeals. The Tribunal found that the recent Instruction No. 5/2014, which sets a Rs. 4 lakh limit for appeals before ITAT, should similarly apply to pending appeals, aligning with the objective of reducing litigation for cases with low tax effects. Conclusion: The Tribunal concluded that the appeal filed by the Revenue was not maintainable as the tax effect was below the Rs. 4 lakh threshold specified in Instruction No. 5/2014. The Ld. DR could not demonstrate any exceptions to this rule, such as issues of constitutional validity, Board's orders being held illegal, or accepted Revenue Audit Objections. Judgment: The appeal of the Revenue was dismissed in limine due to the low tax effect, without delving into the merits of the case. The order was pronounced in the open court.
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