2019 (5) TMI 954 - HC - Income Tax

Monetary limit - maintainability of appeal - Exemption u/s 11 - income earned from running of the Kalyana Mandapam - HELD THAT - When the matter is taken up for admission, the learned Standing Counsel brought to our notice the Circular instruction issued by the Central Board of Direct Taxes vide Circular NO.3/2018 dated 11.7.2018 wherein it is stipulated that appeals shall not be filed/pursued by the Department before the High Court in cases where the tax effect does not exceed ₹ 50 lakhs. In the instant case, the tax effect is said to be less than the monetary limit imposed and therefore, the appeal filed by the Revenue is dismissed as not pressed, keeping open the substantial question of law for determination in an appropriate case.

Summary

Issues:
- Appeal against the correctness of the order passed by the Income Tax Appellate Tribunal regarding exemption under Section 11 of the Income Tax Act for income earned from running a Kalyana Mandapam.

Analysis:
1. The Tax Case Appeal was filed by the Revenue challenging the order of the Income Tax Appellate Tribunal related to the eligibility of the assessee for exemption under Section 11 of the Income Tax Act concerning income derived from operating a Kalyana Mandapam.

2. The Revenue cited a Circular issued by the Central Board of Direct Taxes stating that appeals should not be pursued before the High Court if the tax effect does not exceed Rs. 50 lakhs. In this case, the tax effect was below the specified limit.

3. Consequently, the appeal filed by the Revenue was dismissed as not pressed due to the tax effect being less than the prescribed monetary threshold. However, the substantial question of law raised in the appeal was kept open for future determination in a suitable case.

This judgment highlights the procedural aspect of tax appeals before the High Court, emphasizing the significance of adhering to monetary limits set by regulatory authorities. It underscores the importance of complying with Circular instructions issued by the Central Board of Direct Taxes to streamline the appeal process and ensure efficient adjudication of tax matters within specified thresholds.