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2018 (8) TMI 1053 - AT - Income TaxLaw tax effect - revenue appeal - CBDT has issued Circular No. 3 of 2018 dated 11.07.2018, vide which it has revised the monetary limit to ₹ 20,00,000/- for not filing the appeal before the Tribunal - Held that - From Clause 12 & 13 of the above said circular it is clear that these instructions are applicable to the pending appeals also and as per clause 13, there is clear cut instruction to the department to withdraw or not to press the appeals filed before the ITAT wherein tax effect is less than ₹ 20,00,000/-. These instructions are operative retrospectively to the pending appeals. - Revenue should not have filed the instant appeal before the Tribunal. - Revenue appeal dismissed.
Issues involved:
Appeal against order of CIT(A) - Tax effect less than ?20,00,000 - Applicability of Section 268A of Income Tax Act, 1961 - CBDT Circular No. 3 of 2018 - Withdrawal of appeals with low tax effect - Cross Objection by assessee dismissed. Analysis: The appeal before ITAT Delhi was filed by the department and a Cross Objection was raised by the assessee against the order of CIT(A)-8, New Delhi. The absence of the assessee led to an ex-parte proceeding. The tax effect in the department's appeal was found to be less than ?20,00,000, a fact acknowledged by the ld. CIT DR. Section 268A of the Income Tax Act, 1961, inserted with retrospective effect from 01/04/99, empowers the Board to set monetary limits for filing appeals. The CBDT Circular No. 3 of 2018 revised the monetary limit to ?20,00,000 for not filing appeals before the Tribunal. The circular clarified the definition of 'tax effect' and provided guidelines for calculating it. The circular also specified conditions for filing appeals based on tax effect in relevant assessment years. The Circular further instructed that appeals should not be filed solely based on exceeding monetary limits, emphasizing the need to consider merit. It outlined scenarios where adverse judgments should be contested regardless of tax effect. It clarified that the monetary limits do not apply to writ matters and other Direct tax issues. The Circular also addressed the applicability of monetary limits to cross objections and pending appeals, stressing the need to withdraw or not press appeals below the specified tax limits. The ITAT held that the Revenue should not have filed the appeal due to low tax effect, aligning with the Circular's provisions. The Cross Objection filed by the assessee was deemed infructuous as the department's appeal was dismissed based on low tax effect. Consequently, both the department's appeal and the assessee's Cross Objection were dismissed. The judgment highlighted the retrospective application of the Circular to pending appeals and emphasized the need for compliance with the specified monetary limits. The decision was pronounced in court on 13/08/2018, reflecting the adherence to Section 268A and the CBDT Circular in determining the outcome of the appeal and Cross Objection.
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