2019 (9) TMI 1714 - AT - Income Tax

Maintainability of revenue appeal on low tax effect - scope of relaxation in the monetary limit in departmental appeals - HELD THAT - Going by the prescription of amended Circular No. 17/2019, dated 8th August, 2019, we are of the view that the Revenue should have either not filed the instant appeal before the Tribunal or withdrawn the same as the tax effect in the appeal is admittedly less than the prescribed limit, i.e., Rs. 50,00,000/- for not filing the appeal, which is not maintainable as per the provisions of Section 268A of the Income Tax Act, 1961. As keeping in view the order passed in the case of Dinesh Mudhavlal patel 2019 (8) TMI 752 - ITAT AHMEDABAD we are of the view that the relaxation in the monetary limit in departmental appeals vide circular dated 8th August, 2019 shall be applicable to the pending appeals in addition to the appeals to be filed henceforth. Thus, the contention of ld D.R. is dismissed. Accordingly, we dismiss the appeal filed by the Revenue without going into merits of the case.

Summary

Issues:
1. Maintainability of the appeal by the Revenue due to tax effect less than Rs. 50 lakhs.
2. Interpretation of CBDT Circulars regarding monetary limits for filing appeals.
3. Applicability of amended Circular No. 17/2019 dated 8th August, 2019 to pending appeals.
4. Dismissal of appeal by the Revenue by the ITAT Cuttack.

Analysis:

1. The appeal filed by the Revenue was challenged due to the tax effect being less than Rs. 50 lakhs, as per CBDT Circular No.17/2019. The ITAT Cuttack found that the appeal was not maintainable under the circumstances outlined in the circular.

2. The CBDT Circulars issued on 11th July, 2018, and subsequently amended on 8th August, 2019, specified monetary limits for filing appeals. The amended circular raised the limits for appeals before different forums, emphasizing the need to adhere to these limits for maintainability of appeals.

3. The ITAT Cuttack referred to a previous case where appeals below the prescribed monetary limit had been dismissed. The Tribunal held that the relaxation in monetary limits for departmental appeals, as per the amended circular, applied to pending appeals, allowing for the dismissal of appeals falling below the limit.

4. The ITAT Cuttack dismissed the appeal filed by the Revenue without delving into the merits of the case. It was clarified that the Revenue could file a Miscellaneous Application if the tax effect exceeded the prescribed limit or met the conditions outlined in the circulars. The appeal was ultimately deemed to be non-maintainable.

In conclusion, the ITAT Cuttack upheld the CBDT Circulars regarding monetary limits for filing appeals, applied the amended circular to pending appeals, and dismissed the Revenue's appeal due to the tax effect falling below the prescribed limit. The judgment emphasized the importance of adhering to the specified monetary limits for the maintainability of appeals.