9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (6) TMI 185 - AT - Income TaxMaintainability of appeal - monetary limit - Held that - Recently, the CBDT in its Circular No.21/2015 dated 10th December, 2015 have revised the monetary limit to ₹ 10 lakhs from ₹ 4 lakhs to file the appeal before the Tribunal by the Revenue. On scrutiny of appeal filed by the revenue, it is found that the total tax demand is below the prescribed limit of ₹ 10 lakhs. The CBDT also clarifies that this instruction will apply retrospectively to pending appeals and appeals to be filed henceforth in High Courts/Tribunal. Considering the above CBDT Circular, we found that this appeal of the revenue is not maintainable as the tax effect in this appeal is below ₹ 10 lakhs. Accordingly, we dismiss the appeal of the revenue.
Issues Involved:
Appeal against order u/s.143(3) r.w.s.263 of the I.T.Act - Monetary threshold for revenue to file appeal before ITAT - CBDT instruction No.21/2015 revising tax effect limit to ?10 lakhs - Applicability of revised monetary limit - Retrospective effect of CBDT circular - Calculation of tax effect - Filing appeals based on tax effect - Composite orders involving multiple assessment years - Recording reasons for not filing appeal - Contesting adverse judgments on specified issues - Applicability of monetary limits to different types of cases - Retrospective application of CBDT instruction - Section 268A of the Income-tax Act 1961. Analysis: The appeal before the Appellate Tribunal ITAT Mumbai pertains to a revenue challenge against an order passed under section 143(3) read with section 263 of the Income Tax Act for the assessment year 2007-08. The primary contention raised by the assessee's counsel is based on the recent CBDT instruction No.21/2015, which revised the monetary threshold for the revenue to file appeals. The instruction raised the tax effect limit to ?10 lakhs for appeals before the ITAT. As the tax effect in the current appeal is below the revised limit, the revenue's appeal is deemed not maintainable, as per the CBDT circular. The CBDT circular clarifies that the revised monetary limit of ?10 lakhs applies retrospectively to pending appeals and future filings before High Courts and Tribunals. It introduces the concept of "tax effect," which is defined as the difference between the tax on the total income assessed and the tax that would have been chargeable if the total income were reduced by the amount in dispute. The circular specifies that appeals should be filed based on the tax effect in the relevant assessment year, even in cases of composite orders involving multiple years. Furthermore, the circular mandates that the Commissioner of Income-tax must explicitly record reasons for not filing an appeal due to the tax effect being below the specified limit. It emphasizes that the Department is not precluded from filing appeals in subsequent years or for other assesses if the tax effect exceeds the monetary limits. Adverse judgments on specific issues, such as constitutional validity challenges or revenue audit objections, should be contested irrespective of the tax effect. The CBDT instruction also distinguishes the application of monetary limits in different types of cases, excluding writ matters and other direct tax issues from the specified limits. It highlights that decisions to file appeals in cases like registration of trusts under section 12 A of the IT Act should be based on the merits of each case. The retrospective application of the instruction to pending appeals and the requirement to withdraw appeals below the specified tax limits are also outlined. In conclusion, the Appellate Tribunal, considering the CBDT circular and the tax effect in the current appeal being below ?10 lakhs, dismisses the revenue's appeal. The judgment underscores the importance of adhering to the revised monetary limits for filing appeals and recording reasons for not pursuing appeals based on tax effect thresholds.
|
