2022 (3) TMI 434 - AT - Income Tax

Maintainability of appeal on low tax effect - assessee submitted that the revenue has come in appeal against the relief given by the ld CIT(A), which is below the monetary limit as per the Circular No.17/2019 issued by CBDT dated 8th August, 2019, i.e. ₹ 50,00,000/-, therefore, the appeal is not maintainable and should be dismissed - HELD THAT - We find that CBDT vide circular No.17/2019 in F.No.279/Misc.142/2007- ITJ(Pt) dated 8th August, 2019, has further liberalized its policy for not filing appeals against the decisions of the appellate authorities in favour of the taxpayers, wherein tax involved is below certain threshold limits, and announced its policy decision not to file, or press, the appeals, before this Tribunal, against the appellate orders favourable to the assessee in the cases in which overall tax effect, excluding interest except when interest itself is in dispute, is ₹ 50,00,000/- or less. This circular, only enhances the monetary limits and gives further relaxation. The old circular, beyond any dispute or controversy, categorically applied to the pending appeals as on the date of issuance of circular. The circular dated 8th August 2019 is not a standalone circular. It is to be read in conjunction with the CBDT circular No. 3/2018 (subsequent amendment thereto), and all it does is to replace paragraph nos. 3 and 5 of the said circular. The Hon'ble Supreme Court in the case of The Commissioner of Income Tax-5,New Delhi Vs. Keshav Power Ltd. 2019 (8) TMI 811 - SC ORDER has also applied the Circular No.17/2019 dated 08.08.2019 and has dismissed the appeal holding as follows - Since the tax effect involved in the matter is less than ₹ 2 crores, going by the latest circular issued by the CBDT, we see no reason to interfere in this matter. The Special Leave Petition is dismissed, leaving all the questions of law open. Thus the appeal filed by the Revenue is found to be non-maintainable and hence, dismissed.

Summary

Issues:
1. Condonation of delay in filing appeal due to COVID-19 lockdown.
2. Maintainability of appeal based on monetary limit set by CBDT circular.
3. Application of CBDT circular No. 17/2019 for appeals with tax effect below a certain threshold.
4. Request for liberty to seek recall of dismissal of appeal based on exceptions.

Issue 1: Condonation of delay in filing appeal due to COVID-19 lockdown
The revenue filed an appeal against the order of the CIT(A) after a delay of 346 days. The revenue attributed the delay to the nationwide lockdown for the COVID-19 pandemic, which led to the closure of government offices and limited workforce. The revenue also mentioned engagement in implementing the Vivad Se Viswas Scheme as a reason for the delay. The delay was condoned by the Tribunal, considering the exceptional circumstances of the COVID-19 lockdown and the closure of government offices.

Issue 2: Maintainability of appeal based on monetary limit set by CBDT circular
The revenue was aggrieved by the CIT(A)'s order granting relief on interest payment. The assessee argued that the appeal was not maintainable as the relief granted was below the monetary limit set by CBDT circular No. 17/2019. The circular specified that appeals should not be filed for tax effects below a certain threshold. The Tribunal found that the appeal fell below the specified threshold and, therefore, was not maintainable.

Issue 3: Application of CBDT circular No. 17/2019 for appeals with tax effect below a certain threshold
The CBDT circular No. 17/2019 provided guidelines for not filing appeals against decisions favoring taxpayers when the tax involved is below a certain limit. The circular aimed to provide relief to taxpayers in cases where the overall tax effect was below the specified threshold. The Tribunal emphasized that the circular enhanced monetary limits and applied to pending appeals at the time of its issuance.

Issue 4: Request for liberty to seek recall of dismissal of appeal based on exceptions
The CIT D.R. requested the Tribunal to allow pointing out cases that were wrongly included in the dismissed appeal, either due to miscalculation of tax effect or other valid reasons. The Tribunal accepted this request, granting liberty to identify cases that were inadvertently included in the dismissed appeal and needed further verification. This decision aligned with the principles established by the Hon'ble Supreme Court in a relevant case.

In conclusion, the Tribunal dismissed the revenue's appeal based on the non-maintainability as per the CBDT circular and the principles laid down by the Hon'ble Supreme Court. The decision highlighted the importance of adhering to monetary limits set by circulars and providing opportunities to rectify errors in appeal dismissals.