2022 (3) TMI 1424 - AT - Income Tax

Maintainability of appeal before ITAT - Low tax effect - HELD THAT - We find the tax effect involved in the grounds raised by the Revenue is admittedly below Rs.50 lakhs. In view of the CBDT Circular No.17/2019 dated 8th August 2019 raising the monetary limits for filing of the appeals by the Revenue before the Tribunal to Rs.50 lakhs and the subsequent clarification dated 20th August 2019 to the effect that the said Circular is applicable even to pending appeals the appeal filed by the Revenue is not maintainable. Accordingly the same is dismissed. If the Revenue at any point of time finds that the tax effect involved in the grounds of the Revenue is more than Rs.50 lakhs or that the same is falling under the exceptions provided in the said Circular the Revenue may move necessary application for recall of this order.

Summary

Issues:
1. Appeal filed by Revenue against order of CIT(A)-I, New Delhi for assessment year 2014-15.
2. Applicability of CBDT Circular No.17/2019 dated 8th August, 2019 on tax effect limit for filing appeals by Revenue before Tribunal.

Analysis:
1. The appeal was filed by the Revenue against the order of CIT(A)-I, New Delhi for the assessment year 2014-15. The counsel for the assessee pointed out that the tax effect in the grounds raised by the Revenue was below Rs.50 lakhs. Referring to the CBDT Circular No.17/2019 dated 8th August, 2019, which raised the monetary limit for filing appeals by the Revenue before the Tribunal to Rs.50 lakhs, it was argued that the appeal was not maintainable due to the tax effect being below the specified limit.

2. The Departmental Representative (DR) acknowledged that the tax effect involved in the grounds raised by the Revenue was indeed below Rs.50 lakhs. The DR agreed that the appeal filed by the Revenue fell within the scope of the CBDT Circular No.17/2019 dated 8th August, 2019, along with the subsequent clarification issued on 20th August, 2019. Consequently, it was recognized that the appeal did not meet the threshold for maintainability as per the Circular.

3. Upon considering the arguments from both sides, the Tribunal observed that the tax effect in the grounds raised by the Revenue was undeniably below Rs.50 lakhs. In light of the CBDT Circular No.17/2019 dated 8th August, 2019, which set the limit for filing appeals by the Revenue before the Tribunal at Rs.50 lakhs, and the subsequent clarification dated 20th August, 2019, the Tribunal concluded that the appeal filed by the Revenue was not maintainable. Therefore, the Tribunal dismissed the appeal.

4. The Tribunal, while dismissing the appeal, also provided an option for the Revenue to seek a recall of the order if at any point it discovered that the tax effect in the grounds exceeded Rs.50 lakhs or fell within the exceptions outlined in the Circular. This provision allowed the Revenue to take necessary steps for a potential recall based on specific circumstances related to the tax effect or exceptions specified in the Circular.

5. In conclusion, the Tribunal pronounced the decision to dismiss the appeal filed by the Revenue, emphasizing the adherence to the tax effect limit specified in the CBDT Circular No.17/2019 dated 8th August, 2019. The judgment was delivered in open court on 29.03.2022, settling the matter regarding the maintainability of the appeal based on the prescribed monetary threshold.