2019 (8) TMI 1522 - AT - Income Tax

Maintainability of appeal - low tax effect - HELD THAT - As relying on DINESH MADHAVLAL PATEL 2019 (8) TMI 752 - ITAT AHMEDABAD we are of the view that the relaxation in the monetary limit in departmental appeals vide circular dated 8th August, 2019 shall be applicable to the pending appeals in addition to the appeals to be filed henceforth. Thus, the contention of ld D.R. is dismissed. We dismiss the appeals filed by the Revenue without going into merits of the case. However, it is made clear that the Department is at liberty to file Miscellaneous Application, if the tax effect is found to be more than the prescribed limit of ₹ 50,00,000/- as per the amendment carried out by the CBDT in Circular No.17/2019, dated 8th August, 2019, or any of the conditions etc. as available in the amended para 10 of Circular No.3/2018, dated 20th August, 2018. Accordingly, the appeals of the Revenue deserves to be dismissed.

Summary

Issues:
- Appeal filed by Revenue against order passed by CIT(A)-2 for assessment years 2008-09, 2011-12 & 2012-13.
- Tax effect less than ?50 lakhs in present appeals.
- Applicability of CBDT Circular No.17/2019 dated 8th August, 2019.
- Modification of Circular No.3/2018 dated 11th July, 2018.
- Monetary limits for filing appeals before Appellate Tribunal, High Court, and Supreme Court.
- CBDT Circular No.17/2019 dated 8th August, 2019 enhancing monetary limits.
- Applicability of circulars to pending appeals.
- Dismissal of appeals by Revenue and cross objections by assessee.

Analysis:
The appeals were filed by the Revenue against the CIT(A)-2's order for assessment years 2008-09, 2011-12 & 2012-13. However, the tax effect in these appeals was less than ?50 lakhs, rendering them non-maintainable as per CBDT Circular No.17/2019 dated 8th August, 2019. The Circular specified monetary limits for filing appeals before different appellate authorities, with the latest amendment increasing the limits. The Revenue should not have filed the appeal as the tax effect was below the prescribed limit of ?50,00,000, as per Section 268A of the Income Tax Act, 1961.

The CBDT Circular No.3/2018 dated 11th July, 2018, was modified to include conditions under which appeals should be contested despite the tax effect being below the monetary limits. The Circular dated 8th August, 2019, enhanced the monetary limits for filing appeals by the Department. The Tribunal's decision in a similar case emphasized that the relaxation in monetary limits applies to pending appeals in addition to future appeals.

The Tribunal dismissed the appeals filed by the Revenue without delving into the merits of the case due to the tax effect being below the prescribed limit. The Department was given the liberty to file a Miscellaneous Application if the tax effect exceeded the limit or conditions specified in the circulars were met. Consequently, the cross objections filed by the assessee were deemed infructuous as the Revenue's appeals were dismissed. The decision was made in accordance with the amended circulars and the applicable legal provisions.

In conclusion, the appeals by the Revenue and cross objections by the assessee were dismissed based on the non-maintainability of the appeals due to the tax effect being below the prescribed limit, as per the relevant CBDT circulars and legal provisions. The Tribunal's decision was in line with the guidelines provided in the circulars and previous judgments on similar matters.