2022 (12) TMI 1501 - HC - Income Tax

Monetary limit to file appeal before High Court - Appeal dismissed on low tax effect - HELD THAT - Central Board of Direct Taxes (CBDT) has issued Circular No. 17 of 2019, dated 08.08.2019, amending the previous Circular No. 3 of 2018, dated 11.07.2018, by further enhancing the monetary limits for filing appeals by the Income Tax Department before the Income Tax Appellate Tribunals, High Courts and Supreme Court as a measure for reducing litigation. In paragraph 2 of the said circular we find that the monetary limit fixed for filing an appeal before the High Court is Rs. 1.00 crore. Therefore, the appeal filed by the Department is dismissed in terms of the aforesaid Circular No. 17 of 2019, dated 08.08.2019. However, if the appeal comes within the exception under paragraph 10 of Circular No. 3 of 2018, it would be open to the Income Tax Department to seek revival of the appeal. Miscellaneous applications pending, if any, shall stand closed.

Summary

Issues Involved:
1. Appeal under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal.
2. Monetary limit for filing appeals set by the Central Board of Direct Taxes.
3. Dismissal of the appeal based on Circular No. 17 of 2019.
4. Exception under paragraph 10 of Circular No. 3 of 2018 for seeking revival of the appeal.

Analysis:

1. The appeal in question was filed under Section 260A of the Income Tax Act, 1961, by the revenue against the order passed by the Income Tax Appellate Tribunal, Hyderabad Bench 'B', for the assessment year 1997-98. The appellant, represented by the Standing Counsel for Income Tax Department, acknowledged that the tax effect in this appeal falls below the monetary limit for filing an appeal.

2. The Central Board of Direct Taxes (CBDT) issued Circular No. 17 of 2019, amending the previous Circular No. 3 of 2018, to increase the monetary limits for filing appeals by the Income Tax Department before various judicial bodies. Specifically, the monetary limit fixed for filing an appeal before the High Court was set at Rs. 1.00 crore. This circular aimed to reduce litigation by establishing clear financial thresholds for appeals.

3. Consequently, the appeal filed by the revenue was dismissed in accordance with Circular No. 17 of 2019, dated 08.08.2019, due to the appeal falling below the prescribed monetary limit. However, the judgment noted that if the appeal falls within the exception outlined in paragraph 10 of Circular No. 3 of 2018, the Income Tax Department retains the option to request the revival of the appeal, subject to meeting the specified criteria.

4. The judgment concluded by stating that any miscellaneous applications pending would stand closed, and no costs were awarded in this matter. The decision to dismiss the appeal was based on the clear guidelines provided by the CBDT through its circulars, emphasizing the importance of adhering to the prescribed monetary limits for filing appeals to streamline the judicial process and reduce unnecessary litigation.