2019 (9) TMI 297 - 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directions issued to the Income-tax authorities are binding on those authorities, therefore, the Department should have withdrawn/not pressed the present appeal in view of the aforesaid instruction since the tax effect in the instant appeal is less than the amount of ₹ 50 lakhs.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 revenue and cross objection by assessee against order of CIT(A)-I, New Delhi for AY 2006-07. Applicability of CBDT Circular No. 17/2019 enhancing monetary limits for filing appeals in income tax cases. Whether Circular applies to pending appeals. Tax effect below ?50 lakhs in revenue's appeal. Precedent set by Dinesh Madhavlal Patel case regarding Circular's applicability to pending appeals.

Analysis:

1. The appeal and cross objection were filed against the order of the CIT(A)-I, New Delhi for the Assessment Year 2006-07. During the hearing, it was pointed out that CBDT Circular No. 17/2019 dated 08th August 2019 raised the monetary limit for filing appeals in income tax cases. The Circular stated that the revenue would not prefer any appeal before the Tribunal if the tax effect is less than ?50 lakhs. The department argued that this Circular applied prospectively and not to pending appeals.

2. The CBDT Circular No. 17/2019 dated 08th August 2019 enhanced the monetary limits for filing appeals in income tax cases. The Circular specified different monetary limits for appeals before the Appellate Tribunal, High Court, and Supreme Court. The Circular also addressed scenarios where separate orders are passed for each assessment year or where a composite order covers multiple assessment years. The Circular emphasized calculating tax effect separately for each assessment year in case of disputed issues.

3. The issue of the Circular's applicability to pending appeals was addressed in the Dinesh Madhavlal Patel case. The decision in that case clarified that Circular No. 17/2019 dated 08/08/2019 would apply to all pending appeals. Therefore, the precedent set by the Dinesh Madhavlal Patel case established that the Circular applied to ongoing appeals as well.

4. In the present case, it was found that the tax effect involved in the revenue's appeal was below ?50 lakhs. As per the Circular's instructions, the revenue should have withdrawn or not pressed the appeal since the tax effect was less than the specified amount. Consequently, the appeal filed by the revenue was deemed not maintainable based on the Circular's directives.

5. The Tribunal concluded that the appeal filed by the revenue and the cross objection filed by the assessee were dismissed. The decision was based on the application of Circular No. 17/2019 dated 08/08/2019, which set the monetary limits for filing appeals in income tax cases. The Tribunal also granted liberty to the revenue to file a miscellaneous application if instances mentioned in a specific CBDT Circular were later discerned from the assessment and appellate orders.

In conclusion, the judgment highlighted the importance of adhering to the CBDT Circular's directives regarding monetary limits for filing appeals in income tax cases and established that the Circular applied to pending appeals as well.