2022 (11) TMI 1064 - HC - Income Tax

Maintainability of appeal on low tax effect - cascading effect of circulars - HELD THAT - The value in the appeal is less than the limit prescribed by CBDT Circular. The Supreme Court in the judgment reported in S.C.Naregal v Commissioner of Income Tax 2019 (10) TMI 1535 - SUPREME COURT has considered the effect of CBDT Circular and dismissed the appeal coming within the purport of CBDT Circular. The valuation of the subject appeal since is less than the limit stipulated by CBDT Circular, the judgment of Apex Court in S.C.Naregal (supra) is applicable to the appeal. By a combined reading of the reported decisions and the order of the Supreme Court we are of the view that the appeal could be dismissed as coming within the monetary limit prescribed in Circular No.3/2018, subject to the observations made in 2018 (10) TMI 1977 - SC ORDER

Summary

Issues:
1. Appeal against the order of the Income Tax Appellate Tribunal for the Assessment Year 2015-16.
2. Applicability of exceptions set out in certain decisions of the Apex Court.
3. Consideration of the Circular in relation to the tax effect.
4. Interpretation of the principle laid down by the Apex Court in a specific case.
5. Evaluation of the appeal value in comparison to the limit prescribed by the CBDT Circular.

Analysis:
1. The High Court heard arguments from both parties regarding the appeal filed by the Principal Commissioner of Income Tax against the order of the Income Tax Appellate Tribunal for the Assessment Year 2015-16. The tax effect in this appeal is below the ceiling limit.
2. The petitioner's counsel cited specific decisions of the Apex Court, emphasizing exceptions that could be applicable to the case. These exceptions were related to the application of Circulars in cases with common principles or a large number of matters, as highlighted in the judgments mentioned.
3. The main question revolved around the applicability of the Circular in light of the tax effect and its potential impact on subsequent assessments. The argument was made that the case did not present a cascading effect or involve a group of matters, thus falling under an exception where the appeal could be pursued.
4. Referring to a specific judgment by the Apex Court, the High Court analyzed the principle laid down and examined the includable interest earned by the assessee from various sources. It was concluded that the consideration of the Circular in this case would not restrict the Department's discretion in future assessments.
5. Considering the value of the appeal in relation to the limit set by the CBDT Circular, the High Court found that the case fell within the monetary threshold specified. Therefore, based on the collective reading of relevant decisions and orders, the appeal could be dismissed within the scope of the Circular, subject to the observations made in a specific order by the Supreme Court.