2019 (3) TMI 172 - AT - Wealth-tax

Maintainability of wealth tax appeal - monetary limit - HELD THAT - The CBDT vide earlier Circular No.3/2018, dated 11.07.2018 had prescribed the monetary limits for filing of appeals by the Department before the Appellate Tribunal, High Courts and SLPs/appeals before Supreme Court. As per para 11 of said circular, it was specified that monetary limit in para 3 shall not apply to writ matters and direct matters other than income tax and filing of appeals in such cases shall continue to be governed by relevant provisions of Statute and rules. However, vide circular No.5/2019, dated 05.02.2019, the CBDT has recognized vide para 2 that there is no charge under Wealth Tax Act, 1957 w.e.f. 01.04.2016 and hence as a step towards litigation management, the Board has decided that monetary limits for filing of appeals in income tax cases as prescribed in para 3 of the circular shall also apply to wealth tax appeals. In view of extension of circular to wealth tax appeals coming into effect, which is applicable to pending appeals, then the present appeals filed by the Revenue before the Tribunal because of low tax effect, merits to be dismissed in toto.

Summary

Issues:
1. Maintainability of appeals by Revenue based on tax effect.
2. Application of CBDT circular on monetary limits for filing appeals in wealth tax matters.
3. Dismissal of Revenue's appeals and assessee's cross objections.

Analysis:
1. The appeals filed by Revenue against the orders of CWT(A)-12, Pune for different assessment years were challenged by the assessee on grounds of low tax effect. The Authorized Representative for the assessee argued that the CBDT's latest clarification specified limits for filing appeals in income tax matters should also apply to wealth tax matters. The Departmental Representative for the Revenue accepted this proposition after reviewing the assessed wealth in each case before the Tribunal.

2. The CBDT circulars, specifically Circular No.3/2018 and Circular No.5/2019, set monetary limits for filing appeals by the Department. The latter circular extended these limits to wealth tax appeals, defining "tax effect" and emphasizing that the limits would apply to pending appeals as well. Consequently, the Tribunal dismissed the Revenue's appeals due to low tax effect, without delving into the merits of the additions made in the assessments. The Cross Objections filed by the assessee were also not pressed and dismissed accordingly.

3. The Tribunal clarified that the Revenue could seek re-institution of appeal if exceptions under the circular were met. Ultimately, all appeals by Revenue and Cross Objections by the assessee were dismissed. The judgment was pronounced on February 27, 2019.