2014 (11) TMI 321 - HC - Income Tax

Admissibility of appeal - Tax effect less than the limit prescribed Held that - The tax liability involved in this appeal is below ₹ 2 Lac, which is prescribed as per circular dated 27th March 2000 thus, the appeal cannot be admitted Decided against revenue.

Summary

Issues:
Appeal against Income Tax Appellate Tribunal order - Tax liability below specified limit - Applicability of circular dated 27th March 2000.

Analysis:
The High Court of Gujarat heard an appeal challenging the order of the Income Tax Appellate Tribunal, Ahmedabad, dated 24th March 2004. The appellant contended that since the tax liability involved in the appeal was below Rs. 2 Lac, it should be disposed of in accordance with the circular dated 27th March 2000. The circular specified revised monetary limits for filing appeals, with Rs. 2,00,000 being the limit for appeals before the High Court. The Court, in compliance with the circular, dismissed the present appeal due to the tax liability being below Rs. 2 Lac. Importantly, the dismissal was solely based on the quantum of tax liability and did not reflect any opinion on the merits of the appeal. The judgment emphasized that the new monetary limits should be applied to each case individually, without considering cumulative revenue effects in group cases, as per the circular's instructions.

In conclusion, the High Court's decision to dismiss the appeal was based on the specific monetary limit set by the circular dated 27th March 2000, which dictated that appeals should only be filed if the tax effect exceeds the prescribed thresholds. The Court clarified that the dismissal was solely due to the quantum of tax liability and should not be construed as a judgment on the merits of the appeal. The judgment underscored the importance of adhering to the revised monetary limits outlined in the circular for determining the eligibility of appeals based on tax liability.