2019 (9) TMI 1335 - AT - Income Tax

Maintainability of Appeal - low tax effect - monetary limit to file appeal before ITAT - HELD THAT - Tax effect in these appeals is not exceeding the monetary limit as revised by the CBDT vide Circular dated 08.08.2019 for the purpose of filing of appeal by the department before the Income Tax Appellate Tribunal from Rs. 20, 00, 000/- to Rs. 50, 00, 000/-. Accordingly the appeals of the department are not maintainable being monetary limit is less than/not exceeding Rs. 50, 00, 000/-. The department is at liberty to file the Miscellaneous Application in case the tax effect in these appeals is found to be more then Rs. 50, 00, 000/- or the case falls in any of the exceptions of the circular.

Summary

Issues: Appeal against order of CIT (A) for assessment years 2010-11 & 2011-12; Tax effect less than Rs. 50 lakhs; Revision of monetary limits for filing appeals.

Analysis:
1. Tax Effect Calculation: The appeals were filed by the department against the order of the CIT (A) for the assessment years 2010-11 & 2011-12. The grounds of appeal highlighted that the tax effect calculated by the Assessing Officer in relation to the relief granted by the CIT (A) was less than Rs. 50 lakhs. This discrepancy formed the basis of the department's challenge in the appeals.

2. Revision of Monetary Limits: The Income Tax Appellate Tribunal noted that the tax effect in these appeals did not exceed the revised monetary limit set by the Central Board of Direct Taxes (CBDT) through Circular No. 17 of 2019 dated 08.08.2019. The CBDT circular enhanced the monetary limits for filing appeals by the department before the Tribunal from Rs. 20,00,000 to Rs. 50,00,000. This revision aimed at reducing litigation and streamlining the appeal process.

3. Impact on Appeal Filing: As per the CBDT circular, the Assessing Officer is required to calculate the tax effect separately for each assessment year concerning disputed issues. Appeals can only be filed for assessment years where the tax effect exceeds the monetary limit. Furthermore, in cases of composite orders involving multiple assessment years and common issues, appeals cannot be filed for years where the tax effect is below the monetary limit.

4. Dismissal of Appeals: Considering that the tax effect in the department's appeals did not meet the revised monetary limit of Rs. 50,00,000, the Tribunal held that the appeals were not maintainable. The department was granted the option to file a Miscellaneous Application if the tax effect exceeded Rs. 50,00,000 or if the case fell within the exceptions outlined in the circular. Ultimately, both appeals of the department were dismissed by the Tribunal.

In conclusion, the judgment by the Appellate Tribunal ITAT Jaipur highlighted the significance of adhering to revised monetary limits for filing appeals, as set by the CBDT circular, to streamline the appeal process and reduce unnecessary litigation. The decision to dismiss the department's appeals underscored the strict application of the monetary limits in determining the maintainability of appeals before the Tribunal.