2019 (9) TMI 209 - AT - Income Tax

Low tax effect - Monetary limit - HELD THAT - Tax effect involves in the appeal of the Revenue is below ₹ 50 lakhs. There is no dispute that the Board s instructions or directions issued to the Income-tax authorities are binding on those authorities, therefore, the Department should have withdrawn/not pressed the present appeal in view of the aforesaid instruction since the tax effect in the instant appeal is less than the amount of ₹ 50 lakhs. The issue of applicability of the above circular to pending appeals has been decided by the coordinate bench in Dinesh Madhavlal Patel 2019 (8) TMI 752 - ITAT AHMEDABAD Circular No. 17/2019 dated 08/08/2019 will apply to all pending appeals. Therefore the precedent, it is held that the appeal is not maintainable in the instant case as the tax effect is less than ₹ 50 lakhs. Accordingly, it is held that appeal filed by the revenue is not maintainable. We also hastened to add that certain times instances stated in para No. 10 of the CBDT Circular No. 3/2018 dated 11.07.2018 is not discernable from the assessment and appellate orders, therefore, in such cases, we also give liberty to revenue that if such instances comes to their notice than, revenue may file miscellaneous application with such evidences. - Decided against revenue.

Summary

Issues: Appeal filed by the Department against the order of the ld CIT(A) for respective assessment years - Applicability of CBDT Circular No. 17/2019 dated 08th August 2019 on pending appeals - Tax effect below ?50 lakhs - Maintainability of appeal.

Analysis:
1. The appeal was filed by the Department against the orders of the ld CIT(A) for different assessment years. During the hearing, the Appellant's representatives highlighted Circular No. 17/2019 dated 08th August 2019 issued by the CBDT, which stated that the revenue would not prefer appeals before the Tribunal if the tax effect is less than ?50 lakhs. The Appellant requested the appeal to be decided in accordance with this instruction.

2. The Department's representatives objected to the applicability of the circular on pending appeals, arguing that it should be prospective and not applicable to ongoing cases. After considering the arguments from both sides and examining the circular, it was noted that the CBDT had indeed raised the monetary limit for filing appeals in income tax cases before various appellate authorities.

3. The circular specified different monetary limits for appeals before the Appellate Tribunal, High Court, and Supreme Court. It also addressed scenarios where separate orders were issued for multiple assessment years or composite orders involving common issues. The circular emphasized calculating the tax effect separately for each assessment year and filing appeals accordingly based on the monetary limits.

4. The Tribunal found that the tax effect in the Revenue's appeal was below ?50 lakhs, falling under the revised limit set by the CBDT. Referring to a previous decision by a coordinate bench, it was established that Circular No. 17/2019 dated 08/08/2019 applied to all pending appeals. Therefore, the Tribunal held that the appeal was not maintainable due to the tax effect being below the prescribed limit.

5. Consequently, the appeal filed by the Department was dismissed, in line with the binding instructions of the CBDT. The Tribunal also granted liberty to the Revenue to file a miscellaneous application with relevant evidence in cases where instances mentioned in a previous circular were not evident from the assessment and appellate orders. The decision was pronounced openly on 19/08/2019.