2020 (9) TMI 1288 - AT - Income Tax

Maintainability of appeal of low tax effect - monetary limit prescribed by the Board for filing of appeals before the Tribunal by the Department - HELD THAT - Undisputedly, the tax effect in the present appeal is less than the monetary limit prescribed by the Board for filing of appeals before the Tribunal by the Department. The CBDT vide circular dated 08-08-2019 (supra) has amended Para 3 of Circular No. 3 of 2018 dated 11-07-2018 thereby enhancing monetary limit of tax effect from Rs.20 Lakhs to Rs.50 Lakhs for filing of appeals by the Department before the Tribunal. Thus, without going into merits of the issue raised in the appeal, the present appeal by the Revenue is dismissed on account of low tax effect.

Summary

Issues:
Appeal by Revenue against CIT(A) order for AY 2010-11, low tax effect, applicability of CBDT Circular No. 17/2019, monetary limit for filing appeals before Tribunal, dismissal of appeal by Revenue, possibility of restoration of appeal.

Analysis:
The judgment pertains to an appeal by the Revenue against the order of the Commissioner of Income Tax (Appeals) for the assessment year 2010-11. The representative for the Revenue acknowledged that the total tax effect in the appeal was Rs.91,615, falling below the threshold set by the CBDT Circular No. 17/2019. This circular amended the monetary limit for filing appeals by the Department before the Tribunal from Rs.20 Lakhs to Rs.50 Lakhs. Consequently, despite not delving into the merits of the issue raised, the appeal was dismissed due to the low tax effect.

The Tribunal highlighted that the tax effect in the appeal was below the revised monetary limit specified by the CBDT Circular, thereby justifying the dismissal of the Revenue's appeal. The judgment emphasized adherence to the prescribed limits for filing appeals and underscored the significance of complying with the directives outlined in the Circular. As a result, the appeal was concluded to be dismissed based on the criteria of low tax effect.

Furthermore, the Tribunal clarified that the Revenue retained the option to seek restoration of the appeal by providing substantiating evidence to demonstrate that the appeal fell within the exceptions delineated in the Circular. This provision allowed the Revenue the opportunity to potentially revive the appeal if it could establish that the case warranted an exception as per the Circular's guidelines. Ultimately, the judgment concluded with the dismissal of the Revenue's appeal, leaving open the possibility for the Revenue to pursue restoration under specific circumstances as outlined in the Circular.