2018 (8) TMI 1812 - AT - Income Tax

Monetary limit for maintainability of appeal - low tax effect - HELD THAT - According to the Circular No.3/2018, the revenue is precluded from pursuing its appeal if the tax effect is ₹ 20.00 lakhs or less. Apparently the issue in dispute does not fall in any of the exceptions provided in paragraph 10 of the Circular No.3/2018, referred. D.R, however, sought time to get a certificate from the PCIT/CIT concerned that the grounds urged in this appeal does not fall under any of the exceptions specified in the said circular. However, from the available material, he could not point out that the issue contested in this appeal fall in any of the exceptions. We have noticed that the tax effect involved in this appeal is less than ₹ 20.00 lakhs and the issue contested herein also apparently does not fall in any of the exceptions specified in the Circular. Accordingly we dismiss the appeal of the revenue in limine.

Summary

Issues:
Appeal challenging orders passed by Ld CIT(A) granting relief to assessees, tax effect less than ?20.00 lakhs, Circular No.3/2018 by CBDT precluding revenue from pursuing appeal, exceptions in Circular, dismissal of revenue's appeal, liberty to move for recall.

Analysis:
The Appellate Tribunal, ITAT Mumbai, heard appeals filed by the revenue against orders passed by the Ld CIT(A) granting relief to the assessees for the respective assessment years. The revenue was aggrieved by the decisions of Ld CIT(A) in providing relief to the assessees. The quantum in dispute in these appeals was found to be less than ?20.00 lakhs, leading to the conclusion that the tax effect involved was below the specified threshold.

The CBDT issued Circular No.3/2018 superseding an earlier Circular, which stated that if the tax effect is ?20.00 lakhs or less, the revenue is precluded from pursuing its appeal unless falling under exceptions outlined in the Circular. The Ld D.R. requested time to obtain a certificate confirming that the grounds of appeal did not fall under any exceptions specified in the Circular. However, it was observed that the issue contested in the appeal did not align with any of the exceptions provided in the Circular.

Considering the tax effect being below ?20.00 lakhs and the absence of the appeal falling under any exceptions in the Circular, the Tribunal dismissed the revenue's appeal outright. Nevertheless, the revenue was granted liberty to submit a miscellaneous application for the order's recall if it was established that the issue contested in the appeal fell within the exceptions outlined in paragraph 10 of the Circular. Consequently, all appeals of the revenue were dismissed by the Tribunal, with the order pronounced in open court on 10.08.2018.