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2017 (5) TMI 1317 - HC - Income TaxMonetary limit for filing appeal - audit objection existence - Held that - It is plain that the Revenue s audit objection is for each AY and not for the Assessee in general. In the present instance, while there is an audit objection for AYs 2008-09, 2009-10 and 2010-11, there is no audit objection for the AY in question i.e., AY 2007-08. Therefore, the Revenue cannot take advantage of para 8(c) of the said Circular to justify the filing of the present appeal.
Issues: Appeal by Revenue under Section 260A of the Income Tax Act, 1961 against the ITAT order for AY 2007-08.
Analysis: 1. The appeal was filed by the Revenue under Section 260A of the Income Tax Act, 1961 against the order passed by the Income Tax Appellate Tribunal for the Assessment Year 2007-08. The Senior Standing Counsel for the Revenue pointed out that the tax effect in the case was below the prescribed limit for filing an appeal by the Revenue, which was ?2.4 lakhs. However, it was noted that there was an audit objection for other assessment years but not for the assessment year in question. 2. The Senior Standing Counsel for the Revenue relied on Circular No. 21/2-15 dated 10th December, 2015, specifically referring to para 8, which states that adverse judgments should be contested on merits even if the tax effect is below the prescribed limit, "where Revenue Audit Objection in the case has been accepted by the Department." However, it was highlighted that the Revenue's audit objection was for other assessment years and not for the assessment year under consideration. 3. The Court observed that the Revenue's audit objection pertained to different assessment years and not the one under appeal. While there were audit objections for AYs 2008-09, 2009-10, and 2010-11, there was no audit objection for the AY 2007-08, which was the subject of the appeal. Therefore, the Court concluded that the Revenue could not rely on the circular to justify filing the appeal for the AY 2007-08. 4. Consequently, the Court dismissed the appeal filed by the Revenue against the order of the Income Tax Appellate Tribunal for the Assessment Year 2007-08. The judgment emphasized the importance of the specific audit objection being related to the assessment year under consideration when determining the eligibility of the Revenue to file an appeal based on the prescribed tax effect limit. This detailed analysis covers the issues involved in the legal judgment, providing a comprehensive understanding of the Court's decision and the reasoning behind dismissing the appeal filed by the Revenue.
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