2019 (9) TMI 1326 - AT - Income Tax

Monetary limit - maintainability of appeal - low tax effect - HELD THAT - Appeal of the department is not maintainable being monetary limit is less than/not exceeding ₹ 50,00,000/-. The department is at liberty to file the Miscellaneous Application in case the tax effect in this appeal is found to be more then ₹ 50,00,000/- or the case falls in any of the exceptions of the circular.

Summary

Issues:
- Appeal against the order of ld. CIT (A) for the assessment year 2013-14.
- Tax effect calculated by AO in respect of relief granted by ld. CIT (A) is less than ?50 lakhs.
- Monetary limit revised by CBDT for filing appeals before ITAT.
- Appeal of the department not maintainable due to monetary limit not exceeding ?50 lakhs.

Analysis:
1. The appeal before the ITAT was against the order of ld. CIT (A) for the assessment year 2013-14. The grounds of appeal raised by the department pertained to the tax effect calculated by the Assessing Officer in relation to the relief granted by the ld. CIT (A), which was less than ?50 lakhs. This discrepancy in tax effect was the primary issue raised in the appeal.

2. During the hearing, it was noted that the tax effect in the present appeal did not exceed the revised monetary limit set by the CBDT for filing appeals before the Income Tax Appellate Tribunal. The CBDT Circular No. 17 of 2019 dated 08.08.2019 had enhanced the monetary limit from ?20,00,000 to ?50,00,000 for appeals before the ITAT. The Tribunal referred to the circular and concluded that the appeal was not maintainable as it did not meet the revised monetary threshold.

3. The CBDT circular also provided guidelines on calculating the tax effect separately for each assessment year in cases involving disputed issues across multiple years. It specified that appeals could only be filed for assessment years where the tax effect exceeded the monetary limit. Additionally, in cases of composite orders involving multiple assessment years and common issues, appeals were restricted for years where the tax effect surpassed the monetary limit. The circular emphasized dealing with each assessee separately in cases of composite orders involving multiple taxpayers.

4. Consequently, the Tribunal dismissed the department's appeal on the grounds that it did not meet the revised monetary limit of ?50 lakhs for filing appeals before the ITAT. The department was given the option to file a Miscellaneous Application if the tax effect exceeded ?50 lakhs or if the case fell under any exceptions outlined in the circular. The order was pronounced in the open court on 02/09/2019, thereby concluding the matter in accordance with the monetary limit criteria set by the CBDT.