2019 (8) TMI 1638 - AT - Income Tax

Maintainability of appeal of revenue - low tax effect - HELD THAT - The 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/-.

Summary

Issues:
1. Appeal against order of ld. CIT (A) for assessment year 2015-16.
2. Tax effect calculation exceeding monetary limits set by CBDT Circular.
3. Maintainability of appeal by the department before ITAT due to monetary limit.

Analysis:
1. The appeal before the ITAT was against the order dated 02.11.2018 of the ld. CIT (A) for the assessment year 2015-16. The grounds of appeal highlighted that the tax effect calculated by the AO regarding the relief granted by the ld. CIT (A) was less than ?50 lakhs.

2. The ITAT observed that the tax effect in the appeal did not exceed the revised monetary limit set by the CBDT Circular dated 08.08.2019. The Circular enhanced the monetary limit for filing appeals before the ITAT from ?20,00,000 to ?50,00,000. The Circular specified that the Assessing Officer should calculate the tax effect separately for each assessment year, and appeals could be filed only for those years where the tax effect exceeded the monetary limit. The ITAT concluded that since the tax effect in this case did not exceed ?50,00,000, the appeal by the department was not maintainable.

3. The ITAT further stated that the department could file a Miscellaneous Application if the tax effect was found to be more than ?50,00,000 or if the case fell under any exceptions mentioned in the Circular. Consequently, the appeal by the department was dismissed as it did not meet the monetary limit criteria set by the CBDT Circular.

This judgment emphasizes the importance of adhering to the monetary limits prescribed by the CBDT Circular for filing appeals before the ITAT, ensuring that appeals are maintainable only when the tax effect exceeds the specified threshold.