2020 (7) TMI 772 - AT - Income Tax

Maintainability of appeal - low tax effect - HELD THAT - Parties before us mutually agreed that this revenue appeal is to be dismissed as not maintainable in view of the recent Circular issued by the CBDT dated 08/08/2019 wherein the revenue has been directed to withdraw the appeal preferred by it before the Tribunal if the tax effect on the disputed issues is less than or equal to ₹ 50,00,000/-. It is well settled that this Circular is binding on the revenue authorities. Respectfully following the said Circular, the appeal filed by the revenue is dismissed as not maintainable.

Summary

Issues:
1. Maintainability of the revenue appeal based on the Circular issued by CBDT regarding tax effect threshold.

Analysis:
The appeal before the Appellate Tribunal ITAT Mumbai arose from an order by the ld. Commissioner of Income Tax (Appeals) against the assessment order passed under section 143(3) of the Income Tax Act, 1961. Both parties agreed that the revenue appeal should be dismissed as not maintainable in light of a recent Circular issued by the CBDT on 08/08/2019. The Circular directed the revenue to withdraw appeals if the tax effect on disputed issues is less than or equal to ?50,00,000, which is considered binding on revenue authorities. Consequently, the Tribunal dismissed the revenue's appeal following the Circular.

The Tribunal emphasized that the Circular's directions are to be strictly adhered to, and if the revenue can demonstrate that the case falls under exceptions outlined in the Circular, they may file a miscellaneous application for the order's recall. However, absent such evidence, the appeal was deemed not maintainable and was consequently dismissed. The Tribunal pronounced its order on 27/07/2020, indicating that the appeal filed by the revenue was dismissed due to not meeting the tax effect threshold specified in the CBDT Circular.