2019 (1) TMI 1865 - AT - Income Tax

Monetary limit for maintainability of appeal - Low tax effect - HELD THAT - Board has provided exemptions at clause (10) of the Instructions wherein it has been provided that these instructions will not be applicable, where the Constitutional validity of the provisions of an Act/Rule is under challenge or where Board s order, notification, instruction or circular has been held to be illegal or where Revenue Audit objection in the case has been accepted by the Department or where the addition relates to undisclosed foreign assets/bank accounts etc. We find that the present cases do not fall within the exemption clause and the tax effect is less than ₹ 20 Lacs in each appeal. DR states the liberty may kindly be given to point out, upon necessary further verifications, and to seek recall the dismissal of appeals and restoration of the appeals in the cases (i) in which it can be demonstrated that the appeals are covered by the exceptions (ii) which are inadvertently included in this bunch of appeals, wherein the tax effect, in terms of the CBDT circular (supra), exceeds ₹ 20,00,000. None opposes this prayer; we accept the same. We make it clear that the appellants shall be at liberty to point out the cases which are wrongly included in the appeals so summarily dismissed, either owing to wrong computation of tax effect or owning to such cases being covered by the permissible exceptions- or for any other reason, and we will take appropriate remedial steps in this regard. Appeals are dismissed as not maintainable.

Summary

Issues: Challenge to orders passed by CIT(A) based on tax effect below ?20 Lacs as per CBDT Circular No.3/2018.

Analysis:
1. The appellant Assessing Officer challenged the correctness of orders passed by the CIT(A) in various appeals.
2. The Tribunal noted that as per CBDT Circular No.3/2018, departmental appeals should not be filed before the Tribunal if the tax effect is below ?20 Lacs unless falling under specific exemptions.
3. The exceptions to the Circular include cases where the Constitutional validity of provisions is under challenge, Board's order is held illegal, Revenue Audit objection is accepted, or addition relates to undisclosed foreign assets.
4. As the present cases did not fall within the exemption clause and the tax effect was less than ?20 Lacs in each appeal, the appeals were found not maintainable.
5. The Departmental Representative requested liberty to point out cases covered by exceptions or inadvertently included with tax effect exceeding ?20,00,000 for recall and restoration of appeals, which was accepted by the Tribunal.
6. The Tribunal dismissed the appeals as not maintainable, allowing the appellants to identify cases wrongly included for appropriate remedial steps.
7. Consequently, all appeals filed by the Revenue were dismissed, with the decision pronounced on January 29, 2019.