2022 (3) TMI 659 - AT - Income Tax

Maintainability of appeal on low tax effect - Addition from interest on fixed deposits made in the co-operative banks u/s. 80P(2)(a)(i)/80P(2)(d) - HELD THAT - We find that CBDT vide circular No.17/2019 in F.No.279/Misc.142/2007- ITJ(Pt) dated 8th August, 2019, 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. In the circumstances, respectfully following the principles laid down by 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 and in the light of the above discussions, the appeal filed by the Revenue is found to be non-maintainable and hence, dismissed.

Summary

Issues Involved:
1. Condonation of delay in filing appeal due to COVID-19 lockdown.
2. Deletion of addition from interest on fixed deposits under sections 80P(2)(a)(i)/80P(2)(d) of the I.T. Act.
3. Maintainability of appeal based on monetary limit as per CBDT Circular No.17/2019.

Analysis:
Issue 1: The appeal filed by the revenue was time-barred by 111 days, and a condonation petition was submitted citing the COVID-19 lockdown as the reason for the delay. The Tribunal considered the circumstances, including the closure of government offices during the lockdown, and granted the condonation of the delay, admitting the appeal for adjudication.

Issue 2: The revenue contested the order of the CIT(A) regarding the deletion of an addition of a specific amount from interest on fixed deposits in cooperative banks under sections 80P(2)(a)(i)/80P(2)(d) of the Income Tax Act. However, the Tribunal found that the tax effect was below the monetary limit specified in CBDT Circular No.17/2019, making the appeal non-maintainable and leading to its dismissal.

Issue 3: The CBDT Circular No.17/2019 provided guidelines on not filing appeals against decisions favoring taxpayers when the tax involved is below a certain threshold. The Tribunal noted that the circular enhanced monetary limits and relaxed policies for appeals with tax effects below the specified threshold. Citing a Supreme Court case, the Tribunal dismissed the revenue's appeal based on the principles laid down in the circular and the court's decision, finding it non-maintainable and hence dismissed.

The Tribunal emphasized the importance of adhering to circulars and policy decisions regarding appeal filings, especially when tax effects fall below specified limits. The decision highlighted the significance of maintaining consistency with circulars issued by the CBDT and judicial precedents in determining the maintainability of appeals based on monetary thresholds.