2018 (11) TMI 1701 - AT - Income Tax

Monetary limit - low tax efffect - HELD THAT - CBDT vide Circular No. 3/2018 dated 11.07.2018 has revised the monetary limit upto ₹ 20 lacs for filing appeals by the Department before the Tribunal and further vide para 13 of the said Circular it has been clarified that said circular is applicable retrospectively to the pending appeals also. In the case of Principal CIT of Income Tax Vs. Surinder Kumar Singhal 2017 (1) TMI 1658 - PUNJAB AND HARYANA HIGH COURT while further relying upon the decision of CIT Vs. Dhanalekshmi Bank Ltd. 2015 (8) TMI 474 - SC ORDER has dismissed the appeal of the Revenue without going into the merits due to low tax effect leaving the question of law open. In view of the CBDT Circular No. 03/2018 (supra) and in the light of the above referred to decision of the Hon'ble Jurisdictional Punjab Haryana High Court (supra), the present appeal of the Revenue is dismissed due to low tax effect.

Summary

Issues:
1. Applicability of CBDT Circular No. 3/2018 for filing appeals by the Department before the Tribunal.
2. Dismissal of the Revenue's appeal due to low tax effect.
3. Clarification on the dismissal of the appeal not affirming the order of the CIT(A) on merits.

Analysis:

1. The judgment addresses the applicability of CBDT Circular No. 3/2018, which revised the monetary limit for filing appeals by the Department before the Tribunal to less than ?20 lakhs. The Ld. Counsel of the assessee pointed out that the tax effect in the present case falls below the specified threshold. The Ld. DR for the Revenue acknowledged the applicability of the circular, leading to the conclusion that the appeal of the Revenue is liable to be dismissed in accordance with the circular.

2. The judgment cites the decision of the Hon'ble Punjab & Haryana High Court in a specific case, where an appeal of the Revenue was dismissed due to low tax effect, following the principles laid down by the Hon'ble Supreme Court in a previous case. The judgment emphasizes that the current appeal of the Revenue is also dismissed based on the low tax effect, in line with the CBDT Circular No. 3/2018 and the aforementioned decisions. It is clarified that the dismissal does not signify affirmation of the CIT(A)'s order on merits, leaving the legal issue raised by the Revenue open for future adjudication.

3. The judgment concludes by pronouncing the order in the Open Court, highlighting the procedural aspect of the decision-making process. The dismissal of the Revenue's appeal due to the low tax effect is reiterated, with a specific mention that the decision does not imply a validation of the CIT(A)'s order on its substantive merits. The legal issue raised by the Revenue is explicitly stated to be left open for consideration in a suitable case in the future.