2021 (12) TMI 992 - HC - Income Tax

Maintainability of appeal - low tax effect - -HELD THAT - It is not in dispute that the noted Circular No. 17/2019 is extension of Circular No. 3/2018 issued by the CBDT whereby certain modifications have been made in the original circular especially in respect of enhancement of revision of monetary limits for appeals/SLPs in income tax matters. Appellant-Department was duly represented at the time of hearing of appeal before the ITAT Chandigarh. No such ground had been raised on behalf of the Appellant- Department before the ITAT Chandigarh requiring the said Tribunal to decide the matter on merits in view of Clause 10 (c) of the Circular No. 3/2018. Once the Appellant-Department had not raised the plea of applicability of Clause 10 (c) of CBDT Circular No. 3/2018 it cannot be allowed to raise such plea in the present appeal.ITAT has correctly held the appeal before it to be not maintainable in view of clear mandate of Circular No. 17/2019. Same principle applies to the filing of present appeal. Hence no substantial question of law arises for determination by this Court.

Summary

Issues Involved:
Challenge to assessment order disallowing deduction under Section 80IC of Income Tax Act - Applicability of Circular No. 17/2019 issued by CBDT - Failure to consider merits of the case by ITAT.

Analysis:
1. The respondent-assessee-firm declared income and claimed deduction under Section 80IC of the Income Tax Act for the Assessment Year 2012-13. The assessment was completed under Section 143 (3) of the Act, disallowing a portion of the deduction. The assessee appealed to CIT(A) Shimla, which allowed the appeal.

2. The Appellant-Department challenged the CIT(A) order before ITAT, Chandigarh. The ITAT dismissed the appeal, prompting the Appellant-Department to contest the decision based on Circular No. 17/2019 issued by CBDT, which enhanced monetary limits for filing appeals. The Appellant-Department argued that ITAT failed to consider the merits of the case and that the circular was not applicable due to Clause 10 (c) of CBDT Circular No. 3/2018.

3. The main issue revolved around the applicability of Clause 10 (c) of Circular No. 3/2018 in light of Circular No. 17/2019. The ITAT considered the revised monetary limits for filing appeals set by Circular No. 17/2019, which increased the limits for different levels of appeal. The Appellant-Department did not raise the applicability of Clause 10 (c) of Circular No. 3/2018 during the ITAT hearing, precluding them from raising it in the current appeal.

4. The ITAT correctly found the appeal not maintainable under the provisions of Circular No. 17/2019. Consequently, the High Court dismissed the appeal, stating that no substantial question of law arose for determination. The judgment emphasized that since the Appellant-Department did not raise the plea of applicability of Clause 10 (c) during the ITAT proceedings, they could not introduce it in the current appeal.

5. The High Court found no other deficiencies in the ITAT's order and upheld the dismissal of the appeal. The judgment concluded that based on the discussion, there was no merit in the appeal, and any pending applications were also dismissed accordingly.