2019 (8) TMI 1653 - AT - Income Tax

Maintainability of appeal on low tax effect - Monetary limits for filing of appeals by the Department - 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/-. 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. Appeal of the department is dismissed.

Summary

Issues:
1. Appeal by the department challenging the order of ld. CIT (A) for the assessment year 2015-16.
2. Calculation of tax effect below the revised monetary limit set by CBDT for filing appeals before ITAT.
3. Applicability of the revised monetary limit on the present appeal.
4. Dismissal of the department's appeal due to the monetary limit not exceeding ?50,00,000.

Analysis:
1. The appeal before the Appellate Tribunal ITAT Jaipur was filed by the department against the order of ld. CIT (A) for the assessment year 2015-16. The grounds of appeal were based on the tax effect calculated by the Assessing Officer in relation to the relief granted by the ld. CIT (A) which was challenged in the appeal.

2. During the hearing, it was noted that the tax effect in the appeal did not exceed the revised monetary limit set by the CBDT through Circular No. 17 of 2019 dated 08.08.2019. The CBDT circular enhanced the monetary limits for filing appeals before the ITAT from ?20,00,000 to ?50,00,000. The circular emphasized the separate calculation of tax effect for each assessment year and the restriction on filing appeals where the tax effect is below the monetary limit.

3. Considering the revised monetary limit, it was concluded that the appeal of the department was not maintainable as the tax effect did not exceed ?50,00,000. The judgment highlighted the importance of adhering to the monetary limits set by the CBDT for reducing litigation and streamlining the appeal process.

4. 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 under any exceptions outlined in the circular. However, in the absence of meeting the monetary limit criteria, the appeal of the department was ultimately dismissed, emphasizing the strict adherence to the revised monetary limits as per the CBDT circular.

In conclusion, the judgment focused on the significance of complying with the revised monetary limits for filing appeals before the ITAT, ensuring efficient management of tax litigation and avoiding unnecessary appeals where the tax effect falls below the prescribed threshold.