2019 (8) TMI 1466 - AT - Income Tax

Maintainability of appeal - low tax effect - monetary limit - HELD THAT - Relaxation in monetary limits for departmental appeals, vide CBDT circular dated 8th August 2019 (supra) shall be applicable to the pending appeals in addition to the appeals to be filed henceforth. Commissioner (DR) then submits liberty may kindly be given to point out, upon necessary further verifications, and to seek recall the dismissal of appeals and restoration of the appeals in the cases (i) in which it can be demonstrated that the appeals are covered by the exceptions, and (ii) which are inadvertently included in this bunch of appeals, wherein the tax effect, in terms of the CBDT circular (supra), exceeds ₹ 50,00,000. None opposes this prayer; we accept the same. We make it clear that the appellants shall be at liberty to point out the cases which are wrongly included in the appeals so summarily dismissed, either owing to wrong computation of tax effect or owning to such cases being covered by the permissible exceptions- or for any other reason, and we will take appropriate remedial steps in this regard. All the appeals stand dismissed as withdrawn. As the appeals filed by the Revenue are found to be non-maintainable and as all the related cross-objections of the assessee arise only as a result of those appeals and merely support the order of the CIT(A), the cross objections filed by the assessee are also dismissed as infructuous. Ordered, accordingly. - Decided against revenue.

Summary

Issues Involved:
1. Correctness of relief granted to taxpayers by the Commissioners of Income Tax (Appeals).
2. Tax effect involved in the appeals.
3. Application of CBDT Circular dated 8.8.2019.
4. Retrospective application of the CBDT Circular.
5. Liberty to Revenue for further verifications and recall of dismissed appeals.

Detailed Analysis:

1. Correctness of Relief Granted to Taxpayers by the Commissioners of Income Tax (Appeals):
The appeals by the revenue question the correctness of the relief granted to the taxpayers by the Commissioners of Income Tax (Appeals). The cross objections by the assessees support the orders passed by the Commissioner (Appeals). The Tribunal noted that the tax effect involved in these appeals does not exceed ?50,00,000 in each case.

2. Tax Effect Involved in the Appeals:
The Tribunal highlighted that the tax effect in all these appeals is less than ?50,00,000. This threshold is significant as per the CBDT Circular dated 8.8.2019, which sets the monetary limits for filing appeals by the income tax authorities.

3. Application of CBDT Circular dated 8.8.2019:
The CBDT Circular dated 8.8.2019 liberalizes the policy for not filing appeals where the tax involved is below certain thresholds. The Tribunal referred to the ITAT Ahmedabad Bench's order in the case of ITO Ward 3(2), Ahmedabad Vs. Dinesh Madhavlal Patel, which dismissed appeals where the tax effect was below ?50,00,000, citing the CBDT Circular.

4. Retrospective Application of the CBDT Circular:
The Tribunal considered whether the CBDT Circular should apply retrospectively to pending appeals. The Departmental Representative pointed out that the circular states it shall come into effect from the date of issue. However, the Tribunal held that the circular should apply to pending appeals as well. The reasoning was that the circular modifies the earlier circular no. 3 of 2018, which applied retrospectively to pending appeals.

5. Liberty to Revenue for Further Verifications and Recall of Dismissed Appeals:
The Tribunal granted liberty to the Revenue to point out cases where the appeals might be wrongly included due to incorrect computation of tax effect or if they fall under exceptions. The Revenue can seek recall and restoration of such appeals upon necessary verifications.

Conclusion:
The Tribunal dismissed all the appeals of the revenue and the related cross objections as infructuous, following the CBDT Circular and the precedent set by the ITAT Ahmedabad Bench. The Tribunal emphasized that the relaxation in monetary limits for departmental appeals applies to both pending and future appeals. The appellants are allowed to seek recall of dismissed appeals if they can demonstrate the appeals fall under permissible exceptions or were wrongly included. The judgment was pronounced in the open court on 28th August 2019.