2019 (11) TMI 1804 - AT - Income Tax

Maintainability of appeal before ITAT on low tax effect - monetary limits as revised vide circular F. No. 279/Misc./M-93/2018-ITJ, dt. 20/08/2019 - HELD THAT - As per the circulars all the revenue appeals filed before the ITAT, having tax effect of less than Rs. 50,00,000/- have to treated as withdrawn. As relying on case of ITO vs. Dinesh Madhavlal Patel 2019 (8) TMI 752 - ITAT AHMEDABAD we dismiss this appeal of the revenue as withdrawn.

Summary

Issues:
1. Application of revised monetary limits for filing appeals in income tax cases.
2. Interpretation of CBDT circulars regarding the tax effect threshold for appeals.
3. Dismissal of appeals based on the revised monetary limits.

Analysis:
1. The judgment addresses the application of revised monetary limits for filing appeals in income tax cases. The CBDT circulars dated 08/08/2019 and 20/08/2019 modified the existing limits, making it mandatory to withdraw revenue appeals with a tax effect of less than Rs. 50,00,000.

2. The judgment refers to a case where the Ahmedabad Bench of the ITAT held that the revised monetary limits apply not only to future appeals but also to pending appeals. The circular dated 08/08/2019 amended previous circulars and specified new monetary limits for filing appeals at different levels, emphasizing the need for separate calculation of tax effect for each assessment year.

3. Following the Ahmedabad Bench's decision, the Kolkata ITAT dismissed the revenue appeal as withdrawn, in line with the revised monetary limits. The parties were given liberty to seek recall of dismissal in exceptional cases where the tax effect exceeded Rs. 50,00,000 due to computation errors or permissible exceptions. The cross objections by the assessee were also dismissed as infructuous.

This judgment clarifies the application of revised monetary limits for filing appeals in income tax cases, emphasizing the need for separate calculation of tax effect for each assessment year and providing parties with the opportunity to address exceptional cases where the tax effect exceeds the specified limit.