2019 (8) TMI 1478 - AT - Income Tax

Monetary limit - maintainability of appeal - HELD THAT - Tax effect in this appeal is not exceeding the monetary limit as revised by the CBDT vide Circular dated 08.08.2019 for the purpose of filing of appeal by the department before the Income Tax Appellate Tribunal from ₹ 20,00,000/- to ₹ 50,00,000/-. Accordingly, the 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 order of CIT (A) for assessment years 2014-15 & 2016-17.
- Tax effect calculation by AO challenged by department.
- Monetary limit for filing appeals by department revised by CBDT.
- Appeal not maintainable due to tax effect below revised monetary limit.

Analysis:
1. Appeal against CIT (A) Order: The appeals by the department were directed against the order of the ld. CIT (A)- 4, Jaipur for the assessment years 2014-15 & 2016-17. The grounds of appeal primarily focused on the tax effect calculated by the AO in relation to the relief granted by the CIT (A), which was being challenged in the present appeal.

2. Tax Effect Calculation Challenge: The tax effect in the appeal was a crucial aspect under consideration. It was noted that the tax effect in this appeal did not exceed the monetary limit set by the CBDT for filing appeals before the Income Tax Appellate Tribunal. The CBDT Circular dated 08.08.2019 revised the monetary limit from ?20,00,000 to ?50,00,000 for the purpose of filing departmental appeals. Consequently, the department's appeal was deemed not maintainable due to the tax effect being below the revised monetary limit.

3. Revised Monetary Limits by CBDT: The CBDT Circular No. 17 of 2019 dated 08.08.2019 highlighted the enhancement of monetary limits for filing appeals by the department before various judicial forums. The circular aimed at reducing litigation by specifying the revised monetary limits for appeals before the Appellate Tribunal, High Courts, and the Supreme Court in income tax matters.

4. Maintainability of Appeal: The Tribunal concluded that the appeal of the department was not maintainable as the tax effect did not exceed ?50,00,000, which was the revised monetary limit as per the CBDT Circular. The department was given the option to file a Miscellaneous Application if the tax effect was found to be more than ?50,00,000 or if the case fell within any exceptions outlined in the circular.

5. Dismissal of Appeals: Consequently, both appeals of the department were dismissed based on the grounds that the monetary limit for filing appeals was not met. The order was pronounced in the open court on 21/08/2019, emphasizing the adherence to the revised monetary limits set by the CBDT for filing appeals in income tax matters.