2019 (9) TMI 212 - AT - Income Tax

Low tax effect - Monetary limit - HELD THAT - Tax effect involves in the appeal of the Revenue is below 50 lakhs. There is no dispute that the Board s instructions or directions issued to the Income-tax authorities are binding on those authorities therefore the Department should have withdrawn/not pressed the present appeal in view of the aforesaid instruction since the tax effect in the instant appeal is less than the amount of 50 lakhs. The issue of applicability of the above circular to pending appeals has been decided by the coordinate bench in Dinesh Madhavlal Patel 2019 (8) TMI 752 - ITAT AHMEDABAD Circular No. 17/2019 dated 08/08/2019 will apply to all pending appeals. Therefore the precedent it is held that the appeal is not maintainable in the instant case as the tax effect is less than 50 lakhs. Accordingly it is held that appeal filed by the revenue is not maintainable. We also hastened to add that certain times instances stated in para No. 10 of the CBDT Circular No. 3/2018 dated 11.07.2018 is not discernable from the assessment and appellate orders therefore in such cases we also give liberty to revenue that if such instances comes to their notice than revenue may file miscellaneous application with such evidences. - Decided against revenue.

Summary

Issues:
- Applicability of Circular No. 17/2019 dated 08th August 2019 regarding the monetary limit for filing appeals by the department before the Income Tax Appellate Tribunal.
- Whether the Circular applies to pending appeals.
- Effect of the Circular on appeals with tax effect below ?50 lakhs.

Analysis:
1. The appeals were filed by the Department against the orders of the ld CIT(A) for respective assessment years.

2. During the hearing, the ld. ARs pointed out that CBDT Circular No. 17/2019 raised the monetary limit for filing appeals by the revenue. The Circular stated that the revenue would not prefer any appeal before the Tribunal if the tax effect is less than ?50 lakhs. The appellant requested the appeal be decided according to this instruction.

3. The ld DRs objected, arguing that the Circular applies prospectively and not to pending appeals.

4. The CBDT Circular enhanced the monetary limits for filing appeals in income-tax cases before various appellate authorities. The Circular specified different monetary limits for appeals before the Appellate Tribunal, High Court, and Supreme Court. The Circular also addressed scenarios of separate orders for each assessment year versus composite orders for multiple years.

5. The Tribunal found that the tax effect in the appeal was below ?50 lakhs, in line with the Circular's instructions. Citing a precedent, the Tribunal held that Circular No. 17/2019 applies to all pending appeals. Consequently, the appeal filed by the revenue was deemed not maintainable due to the tax effect being below the specified limit.

6. The Tribunal dismissed the appeals filed by the department, emphasizing that the revenue could file a miscellaneous application if instances mentioned in the Circular were not evident from the assessment and appellate orders.

7. The order was pronounced on 21/08/2019, and the appeals were dismissed based on the applicability of the Circular and the tax effect criterion.

This detailed analysis covers the issues of the Circular's applicability, its impact on pending appeals, and the specific tax effect threshold for maintaining appeals before the Tribunal.