2016 (11) TMI 1674 - AT - Income Tax

Maintainability of appeal - low tax effect - Effect of subsequent circulars - HELD THAT - As tax effect for the impugned assessment years were less than Rupees Two lakhs and by virtue of Circular No.5/2008, dated 15.05.2008 of CBDT, the appeals will not maintainable. Substitution of the earlier circulars with subsequent circulars would not in any way affect the applicability of earlier circulars, in so far as it covered direct tax matters other than income tax. Accordingly, we are of the opinion that appeals of the Revenue are not maintainable.

Summary

Issues:
- Applicability of CBDT circulars on tax effect for filing appeals in direct tax matters other than income tax.

Analysis:
The judgment deals with the issue of the applicability of CBDT circulars on the tax effect for filing appeals in direct tax matters other than income tax. The appellant argued that as per Circular No.5/2008, appeals with a tax effect of less than Rupees Two Lakhs should not be filed before the Tribunal. However, the Departmental Representative contended that subsequent circulars, specifically Instruction No. 5/2014 and Circular No. 21/2015, had replaced the earlier circular and mandated that relevant provisions of the statute and rules would apply for direct tax matters other than income tax.

The Tribunal examined the orders and rival contentions. It noted that the Wealth Tax levied on the assessee for certain assessment years was minimal. The Tribunal referred to a previous case where it was held that appeals filed by the Revenue were not maintainable in view of CBDT Instruction No. 3/2011, which specified monetary limits for filing appeals in income tax matters. The Tribunal analyzed the evolution of CBDT instructions, noting that earlier instructions applied to direct tax matters like wealth tax.

The Tribunal further delved into the supersession of earlier circulars by subsequent circulars and highlighted the importance of specific instructions for different types of taxes. It referenced Instruction No. 5/2007, which increased the monetary limit for filing appeals before the Tribunal, and Instruction No. 1979, which applied to wealth tax, gift tax, and Estate Duty matters. The Tribunal concluded that the substitution of earlier circulars with subsequent ones would not affect the applicability of the earlier circulars to direct tax matters other than income tax.

In light of the above analysis, the Tribunal held that the appeals of the Revenue were not maintainable as the earlier circulars regarding tax effect limits for filing appeals in direct tax matters, including wealth tax, remained in force. Consequently, the appeals of the Revenue were dismissed, and the judgment was pronounced on the 23rd day of November 2016 in Chennai.