2019 (4) TMI 679 - AT - Income Tax

Monetary limit - Penalty u/s 271(1)(c) - Held that - Admittedly the tax effect in the present appeal is less than Rs. 20 lakhs. Vide Circular No.3/2018 Dated 11thJuly 2018 issued by CBDT it has been directed that the Department shall not file appeal before the Tribunal in case where the tax effect does not exceed the monetary limit of Rs. 20 lakhs. It is also directed that this instruction will apply retrospectively to pending appeals and appeals to be filed henceforth in Tribunals. Pending appeals below the specified tax limit may be withdrawn/not pressed. The Ld. D.R. in view of the Board s Circular above did not press the Departmental Appeal. The case of the Department would not fall in the exceptions provided in the above Board Circular. - Decided against revenue

Summary

Issues:
Challenge to cancellation of penalty under section 271(1)(c) of the I.T. Act, 1961 for A.Y. 2009-2010.

Analysis:
The appeal by the Revenue was directed against the Order of the Ld. CIT(A)-23, New Delhi, challenging the cancellation of penalty under section 271(1)(c) of the I.T. Act, 1961, amounting to Rs. 17,54,405. The tax effect in the present appeal was less than Rs. 20 lakhs. As per Circular No.3/2018 issued by CBDT, the Department was directed not to file an appeal before the Tribunal where the tax effect did not exceed Rs. 20 lakhs. The Departmental Appeal was not pressed by the Ld. D.R. in compliance with the Board's Circular. The case of the Department did not fall within the exceptions provided in the Circular. Consequently, the Departmental appeal was deemed not maintainable as it was filed against the Board instructions, leading to its dismissal.

Therefore, the appeal of the Department challenging the cancellation of penalty under section 271(1)(c) of the I.T. Act, 1961 for A.Y. 2009-2010 was dismissed in light of the Circular issued by CBDT, which set a monetary limit of Rs. 20 lakhs for filing appeals before the Tribunal. The Department's failure to meet the criteria outlined in the Circular rendered their appeal not maintainable, resulting in its dismissal.