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2015 (6) TMI 452 - AT - Income TaxPrescribed monetary limits for filing of appeal before ITAT - Whether, this appeal of revenue, which is below the prescribed limit of tax effect in view of the Board s Instruction No.5/2014 issued on 10.07.2014 revising the monetary limits for filing of appeals by the Department before ITAT is maintainable or not? - Held that - On query from the Bench, the Ld. DR could not point out any of the exceptions as provided in the Circular as that this is a loss case having tax effect more than the prescribed limit, which should be taken into account,or that this is a composite order for many assessment years where tax effect will be more than the prescribed limit as per para 5 of above instructions, or that this is a case, where, in the case of revenue, where constitutional validity of the provision of the Act or I.T. Rules 1962 are under challenge,or that Board s order, Notification, Instruction or Circular has been held to be illegal or ultra vires, or that Revenue Audit Objection in the case has been accepted by the Department and the same is under challenge. The Ld. DR could not point out any of the exceptions as provided above. Accordingly, this being a low tax effect case, the appeal of the revenue dismissed in limine without going into merits. - Decided against revenue.
Issues Involved:
1. Applicability of CBDT Instruction No. 5/2014 on pending appeals. 2. Monetary limits for filing appeals before ITAT. 3. Exceptions to the applicability of monetary limits for filing appeals. Detailed Analysis: 1. Applicability of CBDT Instruction No. 5/2014 on pending appeals: The primary issue was whether the appeal of the revenue, which had a tax effect below the prescribed limit as per CBDT Instruction No. 5/2014, was maintainable. The Instruction No. 5/2014, issued on 10.07.2014, revised the monetary limits for filing appeals before ITAT, setting a threshold of Rs. 4 lakhs. The revenue argued that this instruction should apply prospectively to appeals filed on or after 10.07.2014 and not to those filed before this date. The tribunal referred to the Hon'ble Delhi High Court's decision in CIT Vs M/s. P. S. Jain & Co. and the Hon'ble Gujarat High Court's decision in CIT v. Sureshchandra Durgaprasad Khatod (HUF), which held that such instructions should apply to pending cases to reduce the burden of litigation. The courts emphasized that the main objective of these instructions was to reduce pending litigation involving minimal tax effect. 2. Monetary limits for filing appeals before ITAT: The tribunal noted that the CBDT Instruction No. 5/2014 set the monetary limit for filing appeals before ITAT at Rs. 4 lakhs. This instruction was issued to minimize litigation where the tax effect is considerably low. The tribunal highlighted that similar instructions had been interpreted by various High Courts to apply retrospectively to pending cases, thereby dismissing appeals with tax effects below the specified limits. The tribunal cited the Gujarat High Court's interpretation that the monetary limits specified in the instructions would apply to pending cases, aligning with the objective of reducing litigation with minimal tax effect. The tribunal also referred to the Karnataka High Court's decision, which held that Instruction No. 3/2011 applied to pending appeals, dismissing those with tax effects below Rs. 10 lakhs. 3. Exceptions to the applicability of monetary limits for filing appeals: The tribunal examined whether the appeal fell under any exceptions to the monetary limits specified in the CBDT instruction. The exceptions included cases where: - The tax effect exceeded the prescribed limit due to losses. - Composite orders for multiple assessment years had a cumulative tax effect exceeding the limit. - The constitutional validity of provisions or rules was under challenge. - Board's orders, notifications, instructions, or circulars were held to be illegal or ultra vires. - Revenue audit objections were accepted by the department and were under challenge. The tribunal found that none of these exceptions applied to the present case. The CIT-DR could not point out any exception that would justify continuing the appeal despite the low tax effect. Conclusion: Given the low tax effect and the absence of any applicable exceptions, the tribunal dismissed the revenue's appeal in limine without delving into the merits of the case. The tribunal concluded that the appeal was not maintainable under the revised monetary limits specified by CBDT Instruction No. 5/2014. Order: The appeal filed by the revenue was dismissed, and the order was pronounced in the open court on 01.06.2015.
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