2019 (11) TMI 1809 - AT - Income Tax

Monetary limit to appeal before the Tribunal - Dismissal of appeal on low tax effect - HELD THAT - CBDT vide Circular No. 17/2019 dated 08.08.2019, has enhanced the monetary limit for filing of appeals by the Department before the Income Tax Appellate Tribunal from Rs.20 lakhs to Rs.50 lakhs. The said circular also makes reference to the earlier Circular No. 3/2018, dated 11.7.2018 and, especially states that as a step towards further management of litigation, the Board has decided to enhance the monetary limit for filing of the appeals. This circular is not in supersession of the earlier circular but only amends the monetary limits as well as gives clarification with regard to paragraph 5 of the earlier circular. This, inter alia, means that all the other conditions mentioned in the earlier Circular No. 3 of 2018 dated 11.7.2018 will apply mutatis mutandis including that, it will apply to all the pending appeals. CBDT vide Circular dated 20th August, 2019 (F. No. 279/19-93/2018-ITJ), has clarified that it will apply to all pending appeals. Thus, in view of the aforesaid circular, the appeal of the Revenue is dismissed as non-maintainable as the tax effect involved in the appeal is below Rs.50 lakhs. However, it is made clear that the Department is at liberty to file Miscellaneous Application for recalling of the order, if the tax effect is found to be more than the prescribed limit of Rs.50,00,000/- or any of the conditions etc., as available in the amendment carried out in para 10 of Circular No. 3/2018, dated 20.08.2018, is made out. Revenue appeal dismissed.

Summary

Issues Involved:
- Appeal against order dated 17.12.2012 by the Revenue for assessment year 2007-08.
- Applicability of Circular No. 17/2019 dated 08.08.2019 by CBDT regarding the monetary limit for filing appeals before the Income Tax Appellate Tribunal.
- Dismissal of Revenue's appeal due to tax effect below Rs.50 lakhs as per the circular.
- Liberty given to the Department to file a Miscellaneous Application if tax effect exceeds the prescribed limit.

Analysis:

1. Appeal Against Order:
The judgment pertains to an appeal by the Revenue against an order dated 17.12.2012 by the Commissioner of Income Tax (Appeals)-XXXIII, New Delhi, for the assessment year 2007-08. The appeal was brought before the Appellate Tribunal seeking a review of the decision.

2. Applicability of Circular No. 17/2019:
The key issue discussed in the judgment revolves around the applicability of Circular No. 17/2019 dated 08.08.2019 issued by the CBDT. This circular enhanced the monetary limit for filing appeals by the Department before the Income Tax Appellate Tribunal from Rs.20 lakhs to Rs.50 lakhs. It was highlighted that the circular amended the earlier Circular No. 3/2018 and clarified certain aspects related to the monetary limits for filing appeals.

3. Dismissal of Appeal:
The Tribunal, considering the CBDT circular, dismissed the Revenue's appeal as the tax effect involved was below the revised limit of Rs.50 lakhs. The judgment emphasized that the Department could file a Miscellaneous Application for recalling the order if the tax effect exceeded the prescribed limit or met the conditions specified in the circular amendment.

4. Liberty to File Miscellaneous Application:
The judgment provided the Department with the liberty to file a Miscellaneous Application if the tax effect was found to be more than Rs.50 lakhs or if any conditions outlined in the circular were met. This liberty allowed the Department to seek a review of the dismissal in case of a higher tax impact or fulfillment of specified conditions.

In conclusion, the judgment primarily focused on the impact of the revised monetary limit for filing appeals before the Income Tax Appellate Tribunal as per Circular No. 17/2019 dated 08.08.2019 issued by the CBDT. It resulted in the dismissal of the Revenue's appeal due to the tax effect falling below the prescribed threshold, with the option for the Department to file a Miscellaneous Application under certain circumstances.