2019 (9) TMI 303 - AT - Income Tax

Monetary limit - low tax effect - retrospective effect of CBDT circular - HELD THAT - We hold that the revised / enhanced minimum threshold limit of tax effect of ₹ 50, 00, 000/- vide aforesaid recent CBDT Circular No. 17/2019 dated 08.08.2019 is applicable not only for appeals to be filed by Revenue in future; but also for appeals already filed by Revenue in ITAT. Accordingly, in view of the aforesaid recent CBDT Circular No. 17/2019 dated 08/08/2019; the direction in aforesaid earlier Circular dated 11.07.2018 to withdraw /not press Revenue s appeal with tax effect below ₹ 20, 00, 000/-; is now to be read as direction to withdraw / not press Revenue s appeal with tax effect below revised / enhanced limit of ₹ 50, 00, 000/-. By necessary implication, therefore, all existing appeals in ITAT, having tax effect below the revised / enhanced limit of ₹ 50, 00, 000/-, are to be treated as withdrawn / not pressed; and are, not maintainable.

Summary

Issues Involved:
1. Applicability of CBDT Circular No. 17/2019 dated 08.08.2019 on pending appeals.
2. Dismissal of appeals by Revenue due to tax effect being below the revised monetary limit.
3. Dismissal of Cross Objections by the Assessee as infructuous.

Detailed Analysis:

1. Applicability of CBDT Circular No. 17/2019 dated 08.08.2019 on pending appeals:
At the outset, the Tribunal referred to the recent CBDT Circular No. 17/2019 dated 08.08.2019, which enhanced the monetary limit for filing appeals by the Revenue to ?50,00,000. This Circular revised the earlier CBDT Circular No. 3/2018, which had set the limit at ?20,00,000. The Tribunal noted that the Circular aimed at reducing litigation and applied retrospectively to pending appeals. This was supported by precedents from various ITAT benches, including the case of Income Tax Officer, Ward 3(2), Ahmadabad vs. Dinesh Madhavlal Patel, where it was held that the relaxation in monetary limits applied to pending appeals as well as future ones.

2. Dismissal of appeals by Revenue due to tax effect being below the revised monetary limit:
The Tribunal observed that the tax effect in the appeals filed by the Revenue was below ?50,00,000, making these appeals not maintainable under the revised limits set by the CBDT Circular No. 17/2019. The learned Senior Departmental Representative (Ld. Sr. DR) representing the Revenue did not oppose the contention that all these appeals should be dismissed. The Tribunal held that all existing appeals in ITAT with tax effects below the revised limit of ?50,00,000 are to be treated as withdrawn/not pressed and thus not maintainable. This decision was based on the binding nature of CBDT Circulars, which are beneficial for the assessee.

3. Dismissal of Cross Objections by the Assessee as infructuous:
The learned Counsel for the Assessee did not press the Cross Objections (CO Numbers 05/LUC/2006, 25/LUC/2006, and 38/LUC/2006) as they had become infructuous due to the dismissal of the corresponding Departmental Appeals. Consequently, these Cross Objections were dismissed as infructuous and not pressed by the assessee.

Conclusion:
In conclusion, all the appeals filed by the Revenue were dismissed due to the tax effect being below the revised monetary limit of ?50,00,000 as per CBDT Circular No. 17/2019. The Cross Objections filed by the Assessee were also dismissed as infructuous. This consolidated order was pronounced in Open Court on 02/09/2019.