2020 (8) TMI 262 - 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 involved:
1. Appeal against reassessment order for assessment year 2014-15.
2. Appeal against penalty order under section 271 for assessment year 2014-15.
3. Grounds raised by the revenue in the appeal.
4. Applicability of CBDT Circular No.17/2019 regarding tax effect for filing appeals.
5. Interpretation of the circular in conjunction with previous circulars.
6. Reference to the Supreme Court judgment in the case of Commissioner of Income Tax-5, New Delhi Vs. Keshav Power Ltd.
7. Request for further verifications by the Departmental Representative.
8. Decision on the maintainability of the appeals filed by the Revenue.

Analysis:
1. The first issue involved in this judgment pertains to two appeals, one challenging the reassessment order for the assessment year 2014-15 and the other contesting the penalty order under section 271 for the same assessment year. The revenue raised multiple grounds in their appeal, questioning the annulment of the reassessment order due to non-issuance of notice under section 143(2) of the Income Tax Act, among other technicalities.

2. The second issue addressed in the judgment revolves around the applicability of CBDT Circular No.17/2019, which sets a threshold limit for filing appeals based on the tax effect involved. The circular aims to provide relief to taxpayers by not pursuing appeals where the tax effect is below a specified amount. The Tribunal emphasized the importance of this circular and its impact on the maintainability of appeals.

3. Furthermore, the judgment discusses the interpretation of the circular in conjunction with previous circulars, highlighting that the new circular supersedes certain paragraphs of the earlier circular. This clarification ensures a consistent application of the guidelines set forth by the CBDT in determining the eligibility of appeals for consideration.

4. The judgment also references a Supreme Court decision in a similar matter, where the Court dismissed an appeal based on the tax effect falling below a specific threshold as per the CBDT circular. This precedent reinforces the Tribunal's decision to dismiss appeals falling within the prescribed tax effect limits outlined in the circular.

5. The Departmental Representative requested further verifications to identify cases that may have been erroneously included in the appeals dismissed summarily. The Tribunal granted this request, allowing for corrective measures to be taken if certain cases were mistakenly categorized based on tax effect calculations or other exceptions.

6. Finally, after considering all the arguments, the Tribunal concluded that the appeals filed by the Revenue were non-maintainable based on the principles laid down by the Supreme Court and the provisions of the CBDT circular. As a result, the appeals of the Revenue were dismissed in line with the guidelines and precedents discussed in the judgment.