2023 (12) TMI 328 - AT - Income Tax

Maintainability of appeal in Tribunal - low tax effect - HELD THAT - The Central Board of Direct Taxes, vide Circular No. 17/2019, dated 8th August, 2019, F. No. 270/Misc.142/2007ITJ(Pt.), has issued the direction in supersession of the Circular No. 3/2018 dated 11th July, 2018, F.No. 279 of Misc.142/2007-ITJ (Pt.), in consonance with the power entrusted under section 268A of the Income Tax Act, 1961 that no appeal should be filed before the Tribunal in case the tax effect does not exceed Rs. 50 lakhs. In the backdrop of the CBDT Circular No. 17/2019, the Ahmedabad Bench of the Tribunal, in its recent order passed in Dinesh Madhavlal Patel, Ahmedabad and other 2019 (8) TMI 752 - ITAT AHMEDABAD disposing of 628 appeals and COs. It may be clarified that though every care has been taken by the Registry of the Tribunal in identifying the appeal, it may yet be that some error in working the tax effect may have occurred. It may also be that the appeal is otherwise saved by the exceptions listed at para 10 (scope of which stands widened vide amendment dated 20/8/2018) or para 11 of the Circular. Accordingly, liberty is hereby granted to the parties to move the Tribunal in this regard, in which case it shall, if satisfied on merits, recall the appeal for being heard on merits.

Summary

Issues Involved:
1. Tax effect threshold for filing appeals.
2. Application of CBDT Circular No. 17/2019 to pending appeals.

Summary:

Issue 1: Tax Effect Threshold for Filing Appeals

This is Revenue's appeal against the order of the ld. CIT(A)-5, Ludhiana, dated 30.11.2016, for the Assessment Year 2012-13. The ld. Counsel for the assessee pointed out that the tax effect involved in this appeal is less than the monetary limit prescribed by the CBDT. The records confirmed that the tax effect does not exceed Rs. 50 lakhs, making the appeal non-maintainable under CBDT's Circular No. 17/2019, dated 8th August, 2019.

Issue 2: Application of CBDT Circular No. 17/2019 to Pending Appeals

The Central Board of Direct Taxes (CBDT) issued Circular No. 17/2019, enhancing the monetary limits for filing appeals to Rs. 50 lakhs for the Tribunal, Rs. 1 crore for the High Court, and Rs. 2 crores for the Supreme Court. This circular is not standalone and modifies Circular No. 3/2018, which applies retrospectively to pending appeals. The Tribunal, referencing the Ahmedabad Bench's decision, held that the circular applies to both future and pending appeals. The Tribunal dismissed the Revenue's appeal due to the low tax effect, granting liberty to the parties to move the Tribunal if any error in tax effect computation or exceptions apply.

Conclusion:

The appeal of the Revenue was dismissed for low tax effect, in accordance with the CBDT Circular No. 17/2019.