2019 (12) TMI 1662 - AT - Income Tax

Maintanaibility of appeals in ITAT - low tax effect - HELD THAT - We find that the tax effect involves in the appeal of the Revenue is below Rs. 50 lakhs. There is no dispute that the Board s instructions or directions issued to the Income-tax authorities are binding on those authorities therefore the Department should have withdrawn/not pressed the present appeal in view of the aforesaid instruction since the tax effect in the instant appeal is less than the amount of Rs. 50 lakhs. The appeal is not maintainable in the instant case as the tax effect is less than Rs. 50 lakhs. Accordingly it is held that appeal filed by the revenue is not maintainable.

Summary

Issues:
- Appeal filed by Department against the order of the ld CIT(A)-7, New Delhi for the Assessment Year 2012-13.
- Applicability of Circular No. 17/2019 dated 08th August 2019 issued by CBDT regarding monetary limits for filing appeals in income-tax cases.
- Decision on the maintainability of the appeal by the Revenue based on the tax effect being less than Rs. 50 lakhs.
- Application of Circular No. 17/2019 to pending appeals.
- Liberty given to the Revenue to file miscellaneous application in cases where instances mentioned in CBDT Circular No. 3/2018 are not discernible.

Analysis:

The appeal in question was filed by the Department against the order of the ld CIT(A)-7, New Delhi for the Assessment Year 2012-13. During the hearing, the ld. DR highlighted that as per Circular No. 17/2019 dated 08th August 2019 issued by CBDT, the revenue would not prefer any appeal before the Tribunal if the tax effect is less than Rs. 50 lakhs. The Circular aimed to enhance the monetary limits for filing appeals in income-tax cases before different appellate authorities, as specified in the Circular (Para 3). The Circular also addressed scenarios of separate orders for different assessment years and composite orders involving multiple assessment years and common issues.

The Tribunal observed that the tax effect involved in the Revenue's appeal was below Rs. 50 lakhs, falling below the specified limit in the Circular. It was acknowledged that the Board's instructions are binding on the Income-tax authorities, and thus, the Department should have withdrawn or not pressed the appeal considering the tax effect. The Tribunal referred to a previous decision by a coordinate bench in a similar matter to support its stance. Consequently, it was held that the appeal was not maintainable due to the tax effect being less than the prescribed limit.

The Tribunal further clarified that Circular No. 17/2019 dated 08/08/2019 would apply to all pending appeals, including the present case. As a result, the appeal filed by the Revenue was deemed not maintainable. Additionally, the Tribunal granted liberty to the Revenue to file a miscellaneous application if instances mentioned in CBDT Circular No. 3/2018 dated 11.07.2018 were not evident from the assessment and appellate orders. The decision to dismiss the appeal by the department was pronounced in open court on 3rd December 2019.