2016 (4) TMI 1155 - HC - Income Tax

Maintainability of appeal - monetary limit - Held that - As none of the two appeals have a tax effect of Rs. 20, 00, 000/or more Mr. Suresh Kumar learned Counsel appearing for the Revenue does not press these appeals.

Summary

Issues: Appeals relating to Assessment Years 1998-99 and 2003-04; Interpretation of Circular No. 21 of 2015 regarding monetary limits for filing appeals in tax matters; Tax effect below prescribed limits in the appeals; Dismissal of appeals due to tax effect not exceeding the monetary limit.

Analysis:
1. The Appeals in question pertain to the Assessment Years 1998-99 and 2003-04. The central issue revolves around the interpretation and application of Circular No. 21 of 2015 issued by the Central Board for Direct Taxes. This circular sets monetary limits for filing appeals in income tax matters before different appellate authorities. The Circular emphasizes that appeals should not be filed solely based on the tax effect exceeding the prescribed monetary limits but should be decided on the merits of the case.

2. Circular No. 21 of 2015, as highlighted in the judgment, specifies different monetary limits for filing appeals based on the appellate authority. For appeals before the High Court, the monetary limit is set at Rs. 20,00,000. However, the circular also clarifies that in cases of a composite order involving multiple assessment years and common issues, appeals should be filed for all such years, even if the tax effect is below the prescribed limit for any specific year. Each assessee in a composite order involving multiple taxpayers should be dealt with separately.

3. The tax effect in the present cases, as per the Appeal Memos, was below the prescribed limit for filing appeals before the High Court. Specifically, the tax effect for the Assessment Year 2003-04 was 9.26 lakhs and for the Assessment Year 1998-99 was 3 lakhs. Since none of the appeals had a tax effect exceeding Rs. 20,00,000, the learned Counsel for the Revenue decided not to press the appeals, leading to their dismissal.

4. Consequently, both Appeals were dismissed as not pressed due to the tax effect being below the prescribed monetary limit for filing appeals before the High Court. The judgment also ordered the refund of Court Fees as per Rules. This decision aligns with the principles outlined in Circular No. 21 of 2015, emphasizing the importance of considering the merits of each case rather than solely focusing on the tax effect for determining the filing of appeals in income tax matters.