2018 (9) TMI 101 - AT - Income Tax

Maintainability of appeal - monetary limit - Held that - It is observed that the demand/ tax effect in the Revenue s appeal in question is below ₹ 20.00 lacs . Under the powers vested by section. 268A(1) of the I T Act, CBDT has recently issued Circular No. 3/2018 dated 11th July, 2018 (F No. 279/Misc. 142/2007-ITJ(Pt) instructing the authori ties below that departmental appeal should not be filed before ITAT where the demand/tax effect does not exceed ₹ 20 lacs. The circular is specifically mentioned to be applicable for all pending appeals. Subject to some exceptions, it is further directed by CBDT that all the departmental appeals pending before ITAT where the demand/tax effect is not exceeding than 20 lacs should be either withdrawn or not pressed by the departmental representatives. The present appeal is not covered by any exceptions mentioned in the said CBDT circular. Since the tax demand in dispute in this departmental appeal is below the limit set out by CBDT for the appeal, the appeal of the assessee is not maintainable in view of CBDT Circular No. 3 of 2018 dated 11.07.2018.

Summary

Issues:
1. Whether the deletion of addition of short term and long term capital gain by the ld. CIT(A) was justified.
2. Whether the consideration of transfer as a gift by the ld. CIT(A) was justified.
3. Maintainability of the appeal by the Revenue due to the tax effect not exceeding ?20 lakhs as per CBDT Circular No. 3 of 2018.

Analysis:
1. The first issue pertains to the deletion of additions of short term and long term capital gain by the ld. CIT(A). The Revenue's appeal questioned the justification of deleting additions amounting to ?37,98,283 and ?18,99,142 made by the Assessing Officer. The Tribunal noted the grounds of appeal raised by both the Revenue and the assessee. The assessee's cross objection challenged the initiation of proceedings under section 148 of the IT Act, 1961. However, during the hearing, the assessee decided not to press the grounds of the cross objection, leading to their dismissal.

2. The second issue involves the consideration of the transfer as a gift by the ld. CIT(A). The Revenue's appeal faced a challenge regarding the maintainability due to the tax effect not exceeding ?20 lakhs as per CBDT Circular No. 3 of 2018. The ld. AR of the assessee raised an objection based on the prescribed limit set by the circular. Both parties acknowledged that the tax effect in the Revenue's appeal was below the specified threshold. The CBDT Circular emphasized that departmental appeals with a tax effect not exceeding ?20 lakhs should either be withdrawn or not pressed. Since the tax demand in question fell below the limit, the appeal of the Revenue was deemed not maintainable, leading to its dismissal.

3. In conclusion, the Tribunal dismissed both the appeal of the Revenue and the cross objection of the assessee due to the tax effect being below the prescribed limit as per CBDT Circular No. 3 of 2018. The decision was based on the specific instructions provided in the circular, emphasizing the threshold for departmental appeals. The order was pronounced in open court on 29/08/2018, marking the conclusion of the case.