2019 (8) TMI 1667 - AT - Income Tax

Maintainability of appeal - low tax effect - HELD THAT - We note 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 Rs. 20, 00, 000/- to Rs. 50, 00, 000/-. Accordingly the appeal of the department is not maintainable being monetary limit is less than/not exceeding Rs. 50, 00, 000/-.The department is at liberty to file the Miscellaneous Application in case the tax effect in this appeal is found to be more then Rs. 50, 00, 000/- or the case falls in any of the exceptions of the circular.

Summary

Issues involved: Jurisdiction of ITAT Jaipur, Monetary limit for filing appeals, Tax effect calculation

Jurisdiction of ITAT Jaipur:
The appeal before the ITAT Jaipur was directed against the order of the ld. CIT (A), Ajmer for the assessment year 2014-15. The appeal was filed by the department challenging the relief granted by the CIT (Appeals), with the tax effect calculated by the AO being less than Rs. 50,00,000. The ITAT noted that the tax effect did not exceed the revised monetary limit set by the CBDT, which was increased from Rs. 20,00,000 to Rs. 50,00,000 for filing appeals before the ITAT.

Monetary limit for filing appeals:
The CBDT Circular No. 17 of 2019 dated 08.08.2019 enhanced the monetary limits for filing appeals by the department before the ITAT, High Courts, and Supreme Court. The circular specified different monetary limits for appeals before different courts, with the limit for appeals before the ITAT being increased from Rs. 20,00,000 to Rs. 50,00,000. The circular also outlined that the tax effect should be calculated separately for each assessment year in case of multiple disputed issues, and no appeal should be filed if the tax effect is less than the monetary limit.

Tax effect calculation:
The judgment emphasized that the tax effect should be calculated separately for every assessment year in respect of disputed issues. If the disputed issues arise in multiple assessment years for an assessee, the appeal can only be filed for those years where the tax effect exceeds the monetary limit. Additionally, in cases of composite orders involving multiple assessment years and common issues, no appeal should be filed for years where the tax effect is below the monetary limit. The judgment clarified that in cases involving multiple assesses in a composite order, each assessee should be dealt with separately.

In conclusion, the appeal before the ITAT Jaipur was dismissed as the tax effect did not exceed the revised monetary limit of Rs. 50,00,000, in accordance with the CBDT circular. The department was given the option to file a Miscellaneous Application if the tax effect was found to be more than Rs. 50,00,000 or if the case fell under any exceptions outlined in the circular.