2019 (4) TMI 390 - AT - Wealth-tax

Monetary limits for filing of wealth tax appeals - low tax effect - HELD THAT - In view of extension of circular to wealth tax appeals coming into effect, which is applicable to pending appeals, the present appeals filed by the Revenue before the Tribunal are liable to be dismissed on account of low tax effect. Therefore, without going into merits of the additions made in the hands of assessee, we dismiss the appeals filed by Revenue. The Cross Objections filed by assessee against appeals filed by the Revenue have thus become infructuous and are dismissed accordingly. Before parting, we clarify here that the Revenue shall be at liberty to approach the Tribunal for restoration of appeals with the requisite material to show that the appeals are protected by the exceptions prescribed in Para 10 of the Circular No. 3/2018 (supra) or for any other tenable reason. In the result, appeals by the Revenue and the Cross Objections by the assessee are dismissed.

Summary

Issues:
1. Applicability of monetary limits for filing appeals in wealth tax matters.
2. Interpretation of Circular No. 5/2019 and Circular No. 3/2018 in relation to wealth tax appeals.
3. Dismissal of appeals by the Revenue due to low tax effect.
4. Treatment of Cross Objections filed by the assessee.

Analysis:
The judgment by the Appellate Tribunal ITAT Pune dealt with a batch of four appeals involving two cross appeals concerning the assessment years 2008-09 and 2009-10 under the Wealth Tax Act, 1957. The assessee contended that the Revenue's appeals should be dismissed due to a low tax effect as per Circular No. 5/2019 and CBDT Circular No. 3/2018. The Department acknowledged that the tax effect in the appeals was less than ?20 lakhs. The Tribunal considered the circulars and noted that the monetary limits for filing appeals by the Department were specified, except for writ matters and direct tax matters other than income tax. Circular No. 5/2019 extended the monetary limits to wealth tax appeals. The definition of "tax effect" for wealth tax appeals was clarified, focusing on the difference in tax on Net Wealth assessed and the tax if Net Wealth were reduced by the amount in dispute. The Tribunal, in light of the circular's extension to wealth tax appeals, dismissed the Revenue's appeals due to low tax effect without delving into the merits of the additions made. Consequently, the Cross Objections by the assessee were also deemed infructuous and dismissed.

Furthermore, the Tribunal clarified that the Revenue could seek restoration of appeals by demonstrating exceptions under the circular or other valid reasons. Ultimately, the appeals by the Revenue and the Cross Objections by the assessee were dismissed, emphasizing the application of the circulars and the significance of tax effect in determining the fate of appeals. The order was pronounced on 4th April 2019, highlighting the adherence to the prescribed monetary limits and the dismissal of appeals based on the tax effect criterion in wealth tax matters.