2019 (8) TMI 1715 - 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 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/-. The 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.

Summary

Issues involved:
- Appeal against order of ld. CIT (A) for assessment year 2014-15
- Tax effect calculation by AO challenged by department
- Monetary limit for filing appeal before ITAT revised by CBDT
- Appeal not maintainable due to tax effect below revised limit

Analysis:

1. Appeal against order of ld. CIT (A):
The appeal by the department was directed against the order dated 26.03.2019 of ld. CIT (A)-4, Jaipur for the assessment year 2014-15. The grounds of appeal were related to the tax effect calculated by the AO in respect of the relief granted by the ld. CIT (A), which was challenged in the present appeal.

2. Tax effect calculation challenged by department:
The tax effect in the appeal did not exceed the monetary limit set by the CBDT through a Circular dated 08.08.2019. The CBDT circular enhanced the monetary limits for filing appeals by the department before the Income Tax Appellate Tribunal. The tax effect in this case was below the revised limit of ?50,00,000, as per the circular.

3. Monetary limit revision by CBDT:
The CBDT Circular No. 17 of 2019 dated 08.08.2019 replaced the earlier Circular No. 3/2018 to increase the monetary limits for filing appeals before the Income Tax Appellate Tribunal. The revised limit for appeals before the Tribunal was raised from ?20,00,000 to ?50,00,000. This revision aimed at reducing litigation in income tax matters.

4. Appeal not maintainable due to tax effect below limit:
Considering that the tax effect in the department's appeal was below the revised monetary limit of ?50,00,000, the appeal was deemed not maintainable. The Tribunal noted 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 within any exceptions specified in the circular.

5. Final decision:
Consequently, the appeal of the department was dismissed as it did not meet the monetary limit criteria set by the CBDT circular. The order was pronounced in the open court on 21/08/2019.