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2018 (8) TMI 1549 - AT - Income TaxMonetary limit - maintainability of appeal - Held that - Section 268A has been inserted by the Finance Act, 2008 with retrospective effect from 01/04/99. The said section 268 of the Act provides that the Board may issue instruction or directions to the other income-tax authorities fixing monetary limits for not filing the appeals before the Appellate Tribunal or the Courts, said instructions/directions are binding on the income tax authorities. CBDT has issued Circular No. 3 of 2018 dated 11.07.2018, vide which it has revised the monetary limit to ₹ 20,00,000/- for not filing the appeal before the Tribunal - From Clause 12 & 13 of the above said circular it is clear that these instructions are applicable to the pending appeals also and as per clause 13, there is clear cut instruction to the department to withdraw or not to press the appeals filed before the ITAT wherein tax effect is less than ₹ 20,00,000/-. These instructions are operative retrospectively to the pending appeals. Keeping in view the CBDT Circular No. 3 of 2018 dated 11. 07. 2018, we are of the view that the Revenue should not have filed the instant appeal before the Tribunal.
Issues:
Appeal filed by the department against the order of ld. CIT(A)-10, New Delhi with a tax effect less than ?20,00,000. Analysis: The appeal was filed by the department against the order of ld. CIT(A)-10, New Delhi. The counsel for the assessee pointed out that the tax effect in this appeal is less than ?20,00,000, citing Circular No. 3/2018 issued by the CBDT and Section 268A of the Income Tax Act, 1961. The ld. Sr. D.R. supported the Assessing Officer's order but acknowledged that the tax effect is indeed less than ?20,00,000. Section 268A, inserted by the Finance Act, 2008, allows the Board to issue instructions fixing monetary limits for not filing appeals before the Appellate Tribunal or Courts, which are binding on income tax authorities. The CBDT's Circular No. 3 of 2018 revised the monetary limit to ?20,00,000 for not filing appeals before the Tribunal. The circular specifies that appeals should not be filed based solely on exceeding the monetary limits and should be decided on the merits of the case. The tax effect is defined as the difference in tax on the total income assessed and the tax if the total income were reduced by the amount in dispute. The Assessing Officer must calculate the tax effect for each assessment year separately, and appeals can only be filed for years where the tax effect exceeds the monetary limit. The Circular also addresses cases involving composite orders, penalties, and computation of tax effect under specific provisions. It emphasizes that not filing an appeal due to the Circular should be explicitly recorded by the Pr. Commissioner of Income-tax/ Commissioner of Income Tax. Adverse judgments on specific issues should be contested regardless of tax effect. The Circular's provisions do not apply to writ matters and certain direct tax issues, which are governed by relevant statutes and rules. The Circular applies to pending appeals as well, directing the withdrawal or non-pursuance of appeals where the tax effect is below ?20,00,000. Considering the Circular and Section 268A, the Tribunal concluded that the Revenue should not have filed the instant appeal, leading to the dismissal of the department's appeal. The judgment was pronounced on 27/08/2018.
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