2019 (9) TMI 904 - AT - Income Tax

Maintainability of appeal - low tax effect - monetary limit - HELD THAT - In the light of the CBDT Circular dated 8.8.2019, all these appeals of the Revenue have to be dismissed, as the tax effect involved in the quantum in dispute in all these appeals are less than ₹ 50 lacs. We dismiss all the appeals of the revenue in limine as withdrawn. As observed earlier, liberty is given to the revenue to move application for recall of the order, if the tax effect is more than ₹ 50.00 lakhs or if the issues contested therein fall in the category of exceptions prescribed by the CBDT in the Circular or subsequently.

Summary

Issues:
Appeals by revenue against CIT(Appeals) orders, Tax effect not exceeding ?50,00,000, CBDT Circular dated 8.8.2019, Retrospective application of circular, Application of circular to pending appeals, Liberty to revenue for recall of orders.

Analysis:
The judgment involves appeals by the revenue challenging CIT(Appeals) orders where the tax effect does not exceed ?50,00,000, as per the CBDT Circular dated 8.8.2019. The Tribunal observed that the tax effect in dispute in all appeals was below the specified limit, leading to the dismissal of the appeals. The circular aimed at reducing income tax litigation by not filing appeals against decisions favoring taxpayers below certain threshold limits. The Tribunal highlighted the significant monetary threshold limits for filing appeals at different levels of the judiciary, emphasizing the substantial relaxation provided by the circular.

The issue of retrospective application of the circular was raised by the Departmental Representative, arguing that the circular was not clearly retrospective. However, representatives for the taxpayers contended that the circular should have retrospective application, pointing out that it aimed to modify earlier circulars and enhance monetary limits. The Tribunal analyzed the circular's language and its relation to the previous circular, concluding that the concession extended by the CBDT applied not only to future appeals but also to pending appeals.

Regarding the application of the circular to pending appeals, the Tribunal held that the relaxation in monetary limits for departmental appeals as per the circular would be applicable to pending appeals in addition to future appeals. The Tribunal granted liberty to the revenue to seek recall of orders if the tax effect exceeded ?50,00,000 or if the issues fell under exceptions prescribed by the CBDT. Consequently, all appeals by the revenue were dismissed, with liberty given for the revenue to apply for recall based on specified conditions.

In conclusion, the judgment addressed the issues related to the CBDT Circular dated 8.8.2019, the retrospective application of the circular, and its impact on pending appeals. The Tribunal's decision to dismiss the appeals and provide liberty for the revenue to seek recall in specific circumstances aligned with the principles outlined in the circular for reducing income tax litigation.