2020 (8) TMI 261 - AT - Income Tax

Maintainability of appeal - low tax Effect - HELD THAT - We find that vide CBDT circular No.17/2019 in F.No.279/Misc.142/2007- ITJ(Pt) 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 favour of the taxpayers, wherein tax involved is below certain threshold limits, and announced its policy decision not to file, or press, the appeals, before this Tribunal, against the appellate orders favourable to the assessee in the cases in which overall tax effect, excluding interest except when interest itself is in dispute, is ₹ 50,00,000/- or less. This circular, only enhances the monetary limits and gives further relaxation. The old circular, beyond any dispute or controversy, categorically applied to the pending appeals as on the date of issuance of circular. The circular dated 8th August 2019 is not a standalone circular. It is to be read in conjunction with the CBDT circular No. 3/2018 (subsequent amendment thereto), and all it does is to replace paragraph nos. 3 and 5 of the said circular. The Hon'ble Supreme Court in the case of The Commissioner of Income Tax-5,New Delhi Vs. Keshav Power Ltd. . 2019 (8) TMI 811 - SC ORDER held Since the tax effect involved in the matter is less than ₹ 2 crores, going by the latest circular issued by the CBDT, we see no reason to interfere in this matter. The Special Leave Petition is dismissed. Thus appeals filed by the Revenue are found to be non-maintainable.

Summary

Issues:
- Correctness of relief granted to taxpayers by the Commissioner of Income Tax (Appeals)-13, Chennai
- Tax effect not exceeding ?50,00,000
- Applicability and interpretation of CBDT circular No.17/2019 dated 8th August, 2019
- Impact of circular on pending appeals
- Judicial application of circular in similar cases
- Liberty to seek recall of dismissal based on exceptions

Analysis:
The judgment concerns an appeal filed by the Revenue challenging the relief granted to taxpayers by the Commissioner of Income Tax (Appeals)-13, Chennai, where the tax effect involved does not exceed ?50,00,000. The CBDT circular No.17/2019 dated 8th August, 2019, liberalized the policy for not filing appeals against decisions favoring taxpayers below certain threshold limits. The circular specified monetary limits for filing appeals at different levels - ?50,00,000 before the Appellate Tribunal, ?1,00,00,000 before the High Court, and ?2,00,00,000 before the Supreme Court. The circular also outlined provisions for filing appeals in cases involving multiple assessment years and common issues.

The judgment emphasized that the circular dated 8th August 2019 is not standalone but to be read in conjunction with CBDT circular No. 3/2018, replacing specific paragraphs. Notably, the circular applied to pending appeals as of its issuance date. The judgment referred to a Supreme Court case where an appeal was dismissed based on the circular due to the tax effect being below the specified limit. The judgment allowed liberty to seek recall of appeal dismissal if covered by exceptions, ensuring the appellant's right to point out any errors in tax effect computation or exceptions applicable.

Ultimately, the judgment found the appeal filed by the Revenue to be non-maintainable, following the principles established by the Supreme Court in a similar case. The appeal was dismissed based on the circular's provisions and the specific circumstances of the case. The judgment highlighted the importance of adhering to the circular's guidelines and ensuring that appeals meet the specified tax effect thresholds to maintain their validity.