2019 (8) TMI 1538 - AT - Income Tax

Maintainability of appeal - low tax effect - HELD THAT - Since the tax effect , as computed in terms of Circular 3 of 2018, dated 11/7/2018 issued by the Board u/s. 119 r/w s. 268A of the Act, involved in these appeals filed by the Department does not exceed ₹ 50 lakhs in each of these appeals, they are not maintainable in view of CBDT s Circular No.17/2019, dated 8th August, 2019, and are liable to be dismissed as such.

Issues Involved:
1. Applicability of Section 268A of the Income Tax Act.
2. Impact of CBDT Circular No. 17/2019 on pending appeals.
3. Retrospective application of CBDT Circular No. 17/2019.
4. Dismissal of appeals and cross objections based on monetary limits.

Detailed Analysis:

1. Applicability of Section 268A of the Income Tax Act:
Section 268A of the Act mandates that appellate authorities, including the Appellate Tribunal, must adhere to the instructions, directions, and orders issued by the CBDT regarding monetary limits for filing appeals. This provision is intended to regulate the filing of appeals by the Revenue before different appellate authorities, ensuring that appeals are only filed when the tax effect exceeds specified limits.

2. Impact of CBDT Circular No. 17/2019 on Pending Appeals:
The CBDT Circular No. 17/2019, dated 8th August 2019, revised the monetary limits for filing appeals by the Department, setting the threshold at ?50 lakhs for appeals before the Tribunal. The Tribunal noted that since the tax effect in the appeals filed by the Department did not exceed ?50 lakhs, these appeals were not maintainable and were liable to be dismissed. This decision was consistent with the policy to reduce income tax litigation and prevent appeals where the tax effect is below the specified threshold.

3. Retrospective Application of CBDT Circular No. 17/2019:
The Tribunal addressed the issue of whether the Circular No. 17/2019 should apply retrospectively to pending appeals. The Departmental Representative argued that the circular was not explicitly retrospective, as it stated it would come into effect from the date of issue. However, the Tribunal, referencing discussions and judicial precedents, concluded that the circular should apply to pending appeals as well. The Tribunal emphasized that the circular was a modification of an earlier circular (No. 3 of 2018), which was applied retrospectively. Therefore, the revised monetary limits should also apply to appeals pending at the time of issuance.

4. Dismissal of Appeals and Cross Objections Based on Monetary Limits:
The Tribunal decided to dismiss all the appeals filed by the Revenue where the tax effect did not exceed ?50 lakhs, as per the revised monetary limits. The cross objections filed by the assessees, which were in support of the CIT(A)'s orders and related to these appeals, were also dismissed as infructuous. The Tribunal granted liberty to the parties to move for recall of any appeal or cross objection if it was found to be wrongly included or if it fell within the exceptions listed in the relevant circulars.

Conclusion:
In conclusion, the Tribunal dismissed all the Revenue's appeals and the assessees' cross objections based on the revised monetary limits set by CBDT Circular No. 17/2019. The decision underscored the importance of adhering to the monetary thresholds to reduce litigation and expedite the finality of appellate processes. The Tribunal also provided a mechanism for parties to seek recall of dismissed appeals or cross objections if they were found to be wrongly included or fell within specified exceptions.

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