2017 (6) TMI 1347 - AT - Income Tax

Maintainability of appeal - low tax effect - HELD THAT - CBDT has issued Circular No. 21 of 2015 dated 10.12.2015 with retrospective effect, revising the monetary limit to ₹ 10,00,000/- for not filing appeals before the Tribunal. Learned CIT(DR) could not controvert the fact that tax effect involved in the appeal is less than ₹ 10,00,000/-. From para 10 of the above Circular, it is palpable that the Instruction is applicable to the pending appeals also with retrospective effect and there is a clear-cut direction to the Department to withdraw or not press such appeals filed before the ITAT, wherein tax effect is less than ₹ 10,00,000/-. Going by the prescription of the afore-noted Circular, we are of the view that the Revenue should have either not filed the instant appeal before the Tribunal or withdrawn the same as the tax effect in this appeal is admittedly less than the prescribed limit i.e. ₹ 10,00,000/- for not filing the appeal. Accordingly, we dismiss the instant appeal without going into merits of the case. However, the Department is at liberty to file the Miscellaneous Application, if the tax effect is found to be more than the prescribed limited of ₹ 10 lacs or otherwise. Appeal of the Revenue stands dismissed.

Summary

Issues involved:
- Appeal against order of Commissioner of Income Tax (Appeals) for assessment year 2007-08.
- Applicability of Circular No. 21 of 2015 by CBDT with retrospective effect.
- Monetary limit set by the Circular for not filing appeals before the Tribunal.
- Tax effect involved in the appeal being less than the prescribed limit.
- Dismissal of the appeal by the Revenue due to tax effect below the limit.
- Option for the Department to file a Miscellaneous Application if tax effect exceeds the limit.

Analysis:

1. The judgment pertains to an appeal by the Revenue against the order of the Commissioner of Income Tax (Appeals) for the assessment year 2007-08. The Tribunal noted the issuance of Circular No. 21 of 2015 by the CBDT with retrospective effect, which revised the monetary limit to ?10,00,000 for not filing appeals before the Tribunal. The learned CIT(DR) acknowledged that the tax effect involved in the appeal was below the prescribed limit.

2. Referring to para 10 of the Circular, the Tribunal observed that the instruction applied to pending appeals with retrospective effect. The Circular directed the Department to withdraw or not press appeals filed before the ITAT where the tax effect was less than ?10,00,000. Consequently, the Tribunal held that the Revenue should not have filed the instant appeal or should have withdrawn it, given that the tax effect was below the prescribed limit. Thus, the Tribunal dismissed the appeal without delving into the merits of the case.

3. The judgment emphasized that the Department retained the option to file a Miscellaneous Application if the tax effect exceeded the prescribed limit of ?10,00,000 or for any other reason. Ultimately, the appeal of the Revenue was dismissed based on the assessment that the tax effect fell below the limit set by the Circular. The decision was pronounced in an open court on 16th June 2017.