2021 (3) TMI 1363 - HC - Income Tax

Maintainability of appeal on low tax effect - monetary limit for filing or pursuing an appeal before the High Court - correctness of ITAT's conclusion that the CIT(A) has rightly directed the Assessing Officer to delete the liability - HELD THAT - The above appeal is not pursued by the Revenue on account of the low tax effect in terms of Circular No.17/2019 dated 08.08.2019 issued by the Central Board of Direct Taxes. By the said Circular, the monetary limit for filing or pursuing an appeal before the High Court has been increased to ₹ 1 Crore. It is further submitted that the tax effect in this case is less than the threshold limit. In the light of the said submissions, the above tax case appeal is dismissed on account of the low tax effect. The substantial questions of law framed are left open

Summary

Issues:
1. Appeal against the order of the Income Tax Appellate Tribunal for the assessment year 2014-15.
2. Substantial questions of law regarding the deletion of liability and confirmation of CIT(A)'s order.

Analysis:
1. The appeal was filed by the Revenue against the order of the Income Tax Appellate Tribunal for the assessment year 2014-15. The substantial questions of law raised in the appeal pertained to the deletion of liability amounting to &8377; 2,64,55,000. The main contention was the failure of the assessee to prove the identity, genuineness, and creditworthiness of the persons who provided land advances, even during the appellate proceedings.

2. The learned Senior Standing Counsel for the appellant submitted that the appeal was not pursued by the Revenue due to the low tax effect, which fell below the monetary limit set by Circular No.17/2019 issued by the Central Board of Direct Taxes. The Circular increased the threshold limit for filing or pursuing an appeal before the High Court to &8377; 1 Crore. As the tax effect in this case was below the threshold limit, the appeal was dismissed on account of the low tax effect. The substantial questions of law raised were left open for future consideration if the tax effect exceeded the threshold limit.

3. In conclusion, the High Court dismissed the tax case appeal due to the low tax effect falling below the threshold limit set by the Circular. The substantial questions of law were not adjudicated upon, and the appeal was dismissed without costs. However, the Revenue was granted liberty to file a petition before the Court if the tax effect exceeded the threshold limit, to seek restoration of the appeal for a hearing on its merits.