2020 (10) TMI 129 - AT - Income Tax

Maintainability of appeal - low tax effect - HELD THAT - Department ought not have filed the appeals before the ITAT where the tax effect is ₹ 50 Lacs or less. See Dinesh Madhavlal Patel 2019 (8) TMI 752 - ITAT AHMEDABAD

Summary

Issues:
Appeals filed by Revenue against CIT(A) order - Maintainability of appeals as per Circular No. 17/2019 - Retrospective application of circular - Enhanced monetary limits for filing appeals - CBDT Circulars 3 of 2018 and 17 of 2019 - Applicability to pending appeals - Decision based on previous judgments.

Analysis:
The primary issue in this case pertains to the maintainability of appeals filed by the Revenue against the order of the CIT(A), as per Circular No. 17/2019 issued by the CBDT. The circular increased the monetary limit for filing appeals before the ITAT to ?50,00,000 from ?20,00,000. The contention arose regarding the retrospective application of the circular, with the Revenue arguing that it is not retrospective, while the Assessee's Counsel argued for its retrospective application to pending appeals.

Upon careful consideration, the Tribunal noted that the CBDT, through Circular No. 17/2019, had indeed enhanced the monetary limit for filing appeals. The circular explicitly stated the enhanced limits for various appellate levels and provided guidelines for calculating the tax effect for filing appeals. It was observed that the circular aimed at reducing litigation and replacing the previous Circular No. 3 of 2018.

The Tribunal found that the amended Circular No. 17/2019 was applicable to pending appeals, as specified in para 13 of the original Circular No. 3/2018. The Tribunal referred to a decision by another Bench, ITAT Ahmedabad, which supported the view that the enhanced monetary limits applied to pending appeals. The Tribunal emphasized that the circular aimed to manage litigation effectively and that the relaxation in monetary limits should apply to pending appeals in addition to future appeals.

In conclusion, the Tribunal dismissed the appeals filed by the Revenue based on the application of the enhanced monetary limits as per Circular No. 17/2019 and the retrospective effect of the circular on pending appeals. The decision was in line with the CBDT's objective of reducing litigation and ensuring uniformity in filing appeals.