2019 (8) TMI 1848 - AT - Income Tax

Maintanabiity of appeal - low tax effect - HELD THAT - We note that the tax effect in this appeal is not exceeding the monetary limit as revised by the CBDT vide Circular dated 08.08.2019 for the purpose of filing of appeal by the department before the Income Tax Appellate Tribunal from Rs. 20,00,000/- to Rs. 50,00,000/-. The appeal of the department is not maintainable being monetary limit is less than/not exceeding Rs. 50,00,000/-. 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. In the result, both the appeals of the department are dismissed.

Summary

Issues:
- Appeal against order of CIT (A) for assessment years 2010-11 & 2011-12
- Tax effect calculated by AO challenged by department
- Monetary limit for filing appeals by department revised by CBDT
- Appeal not maintainable due to tax effect below revised limit

Analysis:

The judgment pertains to appeals by the department against the order of the CIT (A) for the assessment years 2010-11 & 2011-12. The grounds of appeal primarily revolve around the tax effect calculated by the Assessing Officer (AO) in relation to the relief granted by the CIT (A), which is contested in the present appeal. The key contention is that the tax effect falls below the revised monetary limit set by the CBDT for filing appeals before the Income Tax Appellate Tribunal, which now stands at Rs. 50,00,000 as per Circular No. 17 of 2019 dated 08.08.2019.

During the proceedings, it was noted that the tax effect in the appeal did not exceed the newly revised monetary limit specified by the CBDT. The Circular issued by the CBDT emphasizes the importance of reducing litigation by enhancing the monetary limits for filing appeals at various levels, including before the Appellate Tribunal, High Courts, and the Supreme Court. The circular mandates that the tax effect must be calculated separately for each assessment year and that appeals can only be filed for those years where the tax effect exceeds the monetary limit.

Consequently, the Tribunal found that the appeal by the department was not maintainable due to the tax effect being below the revised limit of Rs. 50,00,000. The judgment highlights the importance of adhering to the revised monetary limits set by the CBDT for filing appeals, ensuring that only cases meeting the specified criteria proceed for adjudication. The department was given the option to file a Miscellaneous Application if the tax effect exceeded the prescribed limit or if the case fell under any exceptions outlined in the circular.

In conclusion, both appeals by the department were dismissed on the grounds of not meeting the revised monetary limit criteria as per the CBDT Circular. The judgment underscores the significance of complying with the specified monetary limits to streamline the appeal process and reduce unnecessary litigation in tax matters.