2019 (8) TMI 1662 - AT - Income Tax

Maintainability of appeal - low tax effect - HELD THAT - As been fairly admitted by the ld. DR that the tax effect in each of the appeals is less then ₹ 50.00 lakh. Recently, the CBDT has issued circular No.17/2019 dated 0808-2019 revising upward the monetary limits for filing of appeals by the Department in Income-tax Cases before various appellate forums. The earlier circular No.03/2018 dated 11-07-2018 fixed monetary limit for filing of appeals by the Revenue before the Tribunal at ₹ 20.00 lakh. Such limit has now been enhanced in the recent Circular dated 08-08-2019 to ₹ 50.00 lakh. Since tax effect in all the appeals under consideration is less than the revised monetary limit of ₹ 50.00 lakh, we are not inclined to entertain such appeals. CBDT vide F.No.279/Misc/M-13/2018-ITJ dated 20-08-2019 has clarified that the revised monetary limits so mentioned in Circular No.17/2019 are applicable to all pending appeals. Not only that, it has further been directed to the competent authorities to withdraw all such appeals on or before 31-10-2019. Thus we dismiss all the appeals filed by the Revenue.

Summary

Issues:
Appeals by the Revenue with tax effect less than ?50.00 lakh, CBDT circular revising monetary limits, retrospective effect of circular, applicability to pending appeals, directive to withdraw appeals by competent authorities.

Analysis:
The judgment pertains to 342 appeals by the Revenue and 7 cross objections by the assessees concerning various assessees and assessment years. The tax effect in each appeal is acknowledged to be less than ?50.00 lakh. The CBDT issued Circular No.17/2019 on 08-08-2019, increasing the monetary limits for filing appeals by the Department in Income-tax Cases before appellate forums from ?20.00 lakh to ?50.00 lakh. As the tax effect in all the appeals is below the revised limit, the Tribunal declined to entertain the appeals.

Regarding concerns about the circular's retrospective or prospective application, the judgment cites a precedent set by the Ahmedabad Bench in the case of ITO Vs. Dinesh Madhavlal Patel, stating that Circular No.17/2019 has a retrospective effect and applies to all pending appeals. Subsequently, the CBDT clarified in a directive dated 20-08-2019 that the revised monetary limits in Circular No.17/2019 are applicable to all pending appeals and instructed competent authorities to withdraw such appeals by 31-10-2019.

Based on the above discussion and in line with the precedent, the Tribunal dismissed all appeals by the Revenue, rendering the cross objections filed by the assesses moot. However, it was clarified that if the tax effect in any appeal exceeds ?50.00 lakh or falls under an exception, the Revenue can approach the Tribunal for necessary action. Consequently, all appeals and cross objections were dismissed, with the order pronounced on 29th August 2019.