2019 (9) TMI 804 - AT - Income Tax

Maintainability of appeal - low tax effect - Monetary limit - scope of Circular No. 17/2019 dated 08/08/2019 - HELD THAT - We find that the 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directions issued to the Income-tax authorities are binding on those authorities, therefore, the Department should have withdrawn/not pressed the present appeal in view of the aforesaid instruction since the tax effect in the instant appeal is less than the amount of ₹ 50 lakhs.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 In view of the above, 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:
- Appeal filed by Department against the order of the ld CIT(A)-2, New Delhi dated 29.02.2016 for the Assessment Year 2006-07.
- Applicability of Circular No. 17/2019 dated 08th August 2019 regarding monetary limits for filing appeals in income-tax cases.
- Interpretation of the circular's monetary limits for filing appeals before the Income Tax Appellate Tribunal, High Courts, and Supreme Court.
- Effect of the circular on pending appeals.
- Precedent set by a coordinate bench in a similar case.
- Decision on the maintainability of the appeal based on the tax effect being less than ?50 lakhs.
- Liberty given to the revenue to file a miscellaneous application if instances mentioned in the circular are discernable later.

Analysis:
The appeal in question was filed by the Department against the order of the ld CIT(A)-2, New Delhi for the Assessment Year 2006-07. During the hearing, the Department cited Circular No. 17/2019 dated 08th August 2019, which raised the monetary limit 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 involving separate orders for different assessment years and the calculation of tax effect for each disputed issue. The circular emphasized that the instructions issued by the Board are binding on Income-tax authorities. The Department should have withdrawn the appeal as the tax effect was below ?50 lakhs, as per the circular.

The coordinate bench in a similar case had already decided on the applicability of the circular to pending appeals. Following the precedent, it was held that Circular No. 17/2019 dated 08/08/2019 would apply to all pending appeals. Consequently, the appeal filed by the revenue was deemed not maintainable due to the tax effect being less than ?50 lakhs. Additionally, the Tribunal granted the revenue the liberty to file a miscellaneous application if instances mentioned in the circular became discernable later. The appeal filed by the Department was ultimately dismissed based on the above analysis.