2019 (8) TMI 1814 - AT - Income Tax

Maintainability of appeal - low tax effect - HELD THAT - 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:
1. Appeal by the department challenging the order of ld. CIT (A) for the assessment year 2014-15.
2. Calculation of tax effect not exceeding the revised monetary limit for filing appeals by the department.
3. Impact of Circular No. 17/2019 dated 8th August 2019 on the monetary limits for filing appeals in tax matters.

Analysis:
1. The appeal before the Appellate Tribunal was filed by the department against the order of ld. CIT (A) for the assessment year 2014-15. The appeal was based on the grounds that the tax effect calculated by the Assessing Officer in relation to the relief granted by the ld. CIT (A) was being challenged, with the tax effect being less than Rs. 50 lakhs.

2. The Tribunal noted that the tax effect in the appeal did not exceed the revised monetary limit set by the CBDT through Circular No. 17/2019 dated 8th August 2019. The circular increased the monetary limit for filing appeals by the department before the Income Tax Appellate Tribunal from Rs. 20 lakhs to Rs. 50 lakhs. The Tribunal emphasized the importance of adhering to the revised monetary limits to reduce litigation.

3. The Circular specified that the Assessing Officer should calculate the tax effect separately for each assessment year concerning disputed issues for every assessee. If the tax effect exceeds the monetary limit for a particular assessment year, an appeal can be filed for that year. However, no appeal should be filed for assessment years where the tax effect is below the monetary limit. Additionally, in cases of composite orders involving multiple assessment years and common issues, appeals should only be filed for years exceeding the monetary limit.

4. The Tribunal held that since the tax effect in the department's appeal did not exceed Rs. 50 lakhs, the appeal was not maintainable. The department was given the option to file a Miscellaneous Application if the tax effect was found to be higher than Rs. 50 lakhs or if the case fell under any exceptions outlined in the circular. Consequently, the appeal of the department was dismissed based on the monetary limit criteria.

In conclusion, the Tribunal's judgment emphasized the significance of complying with the revised monetary limits for filing appeals in tax matters as per Circular No. 17/2019 to streamline the appeal process and reduce unnecessary litigation.