2019 (8) TMI 1127 - AT - Income Tax

Maintainability of appeal - low tax effect - concession extended by the CBDT applicability - HELD THAT - The tax effect is below monetary limits of 50 lakhs as prescribed under the CBDT circular No.3/2018 dated 8th August 2019. As relying on DINESH MADHAVLAL PATEL 2019 (8) TMI 752 - ITAT AHMEDABAD we hereby dismiss the above appeals of the revenue in limine without going to the merits of the case.

Summary

Issues Involved:
1. Maintainability of appeals in view of CBDT’s circular No.3/2018 and subsequent amendment dated 8th August 2019.
2. Tax effect threshold for filing appeals by the revenue.

Detailed Analysis:

Issue 1: Maintainability of Appeals in View of CBDT’s Circular No.3/2018 and Subsequent Amendment Dated 8th August 2019
The counsels for the assessees argued that the appeals are not maintainable due to the CBDT's circular No.3/2018 and its subsequent amendment dated 8th August 2019. This was supported by a precedent set by the coordinate bench of the Tribunal in ITA No.1398/Ahd/2004 and others, where similar appeals were dismissed.

The Tribunal noted that the tax effect in all these appeals is below the monetary limit of ?50 lakhs as prescribed under the CBDT circular No.3/2018. The coordinate bench in the case of ITO Vs. Dinesh Madhavlal Patel held that the circular’s monetary limits are applicable to pending appeals as well. The Tribunal cited the following from the precedent:

"Vide CBDT circular dated 8th August 2019, the income tax department has further liberalized its policy for not filing appeals against the decisions of the appellate authorities in favor of the taxpayers, wherein tax involved is below certain threshold limits."

The Tribunal concluded that the appeals must be dismissed as withdrawn in light of the CBDT circular and the precedent set by the coordinate bench.

Issue 2: Tax Effect Threshold for Filing Appeals by the Revenue
The Tribunal emphasized that the tax effect in all these appeals does not exceed ?50 lakhs. The CBDT circular dated 8th August 2019 stipulates that the income tax department will not file or press appeals before the Tribunal if the tax effect is ?50 lakhs or less. The Tribunal elaborated on the policy:

"The matter ends there and the relief so granted by the Commissioner (Appeals) cannot be challenged before this Tribunal if the tax effect is below ?50 lakhs."

The Tribunal also addressed a concern raised by the Departmental Representative regarding the retrospective application of the circular. It was clarified that the circular is to be read in conjunction with the earlier circular No.3/2018, which applied retrospectively to pending appeals. Therefore, the current circular also applies to pending appeals.

The Tribunal concluded by dismissing the departmental appeals and the related cross objections as infructuous, following the precedent and the CBDT circular.

Conclusion:
The Tribunal dismissed the departmental appeals and the cross objections filed by the assessees, citing the CBDT circular No.3/2018 and its amendment, which set a tax effect threshold of ?50 lakhs for filing appeals. The decision was based on the precedent set by the coordinate bench in the case of ITO Vs. Dinesh Madhavlal Patel, affirming that the circular applies to both future and pending appeals.