2019 (9) TMI 210 - 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directions issued to the Income-tax authorities are binding on those authorities, therefore, the Department should have withdrawn/not pressed the present appeal in view of the aforesaid instruction since the tax effect in the instant appeal is less than the amount of ₹ 50 lakhs.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.

Summary

Issues:
1. Maintainability of appeal under section 153C(1)
2. Deletion of addition of unsecured loan under section 68 of the Income Tax Act, 1961

Analysis:
1. The appeal was filed by the Revenue against the order of Ld.CIT(A)-2, New Delhi for the assessment year 2011-12. The first issue raised was whether the proceeding under section 153C(1) was bad in law. The counsel for the assessee argued that the tax effect involved in the appeal was below the threshold of ?50,00,000 as per a recent CBDT Circular. The Departmental Representative (DR) also agreed that the tax effect was below the specified limit. The Tribunal referred to a decision by the Ahmedabad Bench in a similar case and held that the appeal was not maintainable due to the tax effect being below the threshold. Consequently, the appeal filed by the Revenue was dismissed.

2. The second issue pertained to the deletion of an addition of ?1,03,00,000 as an unsecured loan received under section 68 of the Income Tax Act, 1961. The Tribunal's analysis focused on the applicability of the CBDT Circular dated 8th August 2019, which raised the monetary limit for filing appeals. The Tribunal highlighted that the circular applied to pending appeals along with future filings. The Tribunal emphasized that the modifications in the circular were effective from the date of issuance. Consequently, considering the precedents and circular provisions, the Tribunal dismissed the appeal filed by the Revenue as non-maintainable due to the tax effect being below the prescribed limit.

In conclusion, the Tribunal dismissed the appeal filed by the Revenue on both issues. The decision was based on the assessment of the tax effect being below the specified threshold as per the CBDT Circular. The Tribunal's analysis aligned with the principles established in previous judgments and the provisions of the circular. The order pronounced on 19th August 2019 reflected the dismissal of the appeal and related cross-objections, ultimately upholding the decision of the Ld.CIT(A)-2, New Delhi.