2018 (8) TMI 1937 - AT - Income Tax

Monetary limit - low tax effect - HELD THAT - Instruction is applicable to the pending appeals also with retrospective effect and there is a clear-cut direction to the Department to withdraw or not press such appeals filed before the ITAT, wherein tax effect is less than ₹ 20,00,000/-. We are, therefore, of the view that the Revenue should have either not filed the instant appeal before the Tribunal or withdrawn the same as the tax effect in this appeal is admittedly less than the prescribed limit, i.e., ₹ 20,00,000/- for not filing the appeal. Accordingly, we dismiss the instant appeal without going into merits of the case. However, the Department is at liberty to file the Miscellaneous Application, if the tax effect is found to be more than the prescribed limit of ₹ 20,00,000/- or otherwise. Accordingly, the appeal of the Revenue stands dismissed.

Summary

Issues:
1. Appeal against final assessment order under Income-tax Act, 1961.
2. Applicability of Circular No. 03 of 2018 regarding monetary limit for filing appeals.
3. Tax effect threshold for maintaining appeal before the Tribunal.
4. Dismissal of appeal by the Tribunal based on tax effect criteria.

Issue 1: Appeal against final assessment order under Income-tax Act, 1961
The judgment pertains to an appeal by the Revenue against the final assessment order passed by the Assessing Officer under section 143(3) r.w.s. 144C of the Income-tax Act, 1961 for the assessment year 2010-11.

Issue 2: Applicability of Circular No. 03 of 2018 regarding monetary limit for filing appeals
The ld. AR referred to Circular No. 03 of 2018 issued by the CBDT with retrospective effect, revising the monetary limit to ?20,00,000 for not filing appeals before the Tribunal. The Circular applies to pending appeals as well with a direction to withdraw or not press appeals where the tax effect is less than ?20,00,000.

Issue 3: Tax effect threshold for maintaining appeal before the Tribunal
After considering the Circular, the Tribunal found that the tax effect involved in the instant appeal was less than ?20,00,000. The Tribunal noted that the Revenue should not have filed the appeal or should have withdrawn it as per the prescribed limit. Consequently, the Tribunal dismissed the appeal without delving into the merits of the case.

Issue 4: Dismissal of appeal by the Tribunal based on tax effect criteria
The Tribunal dismissed the Revenue's appeal due to the tax effect being below the prescribed limit of ?20,00,000 for not filing appeals. The Tribunal granted the Department the option to file a Miscellaneous Application if the tax effect exceeded the limit or for other reasons. The appeal of the Revenue was ultimately dismissed, providing the Department with the opportunity to take further action based on the tax effect's assessment.

This detailed analysis of the judgment covers the issues involved, the arguments presented, and the Tribunal's decision based on the applicable legal provisions and Circulars.