2017 (4) TMI 773 - HC - Income Tax

Delay in filing an appeal before the ITAT - Revenue appeal - Condonation of delay - Held that - the learned Tribunal has rightly dismissed the Appeal on the ground that the tax effect involved in the Appeal is less than the monetary limits prescribed by the CBDT to prefer an Appeal before the learned Tribunal. Under the circumstances, as such there is no merits in the Appeal. Under the circumstances, to issue notice upon the respondent and thereafter to condone the delay and thereafter to dismiss the Appeal (which as observed above lacs merits) will cause undue harassment to the respondent-Assessee and for no reason the Assessee will have to incur expenditure to appear in the delay condone application.

Summary

Issues:
Delay in preferring Tax Appeal against the impugned order based on Circular No.21 of 2015 by CBDT.

Analysis:
The High Court heard the application under section 5 of the Limitation Act, where the Revenue sought to condone a delay of 68 days in filing a Tax Appeal against an order by the Income Tax Appellate Tribunal. The Tribunal had dismissed the Appeal citing Circular No.21 of 2015 by the CBDT, which set monetary limits for filing appeals. The tax effect in the Appeal for the assessment year 2000-01 was below the prescribed limit. The Court examined whether there were prima facie merits in the case or if the Tribunal had erred in dismissing the Appeal based on the Circular. The Revenue argued that a common issue had arisen in another Appeal for a different assessment year, but the Court found that the Circular did not support this argument. The Court noted that the order before the Tribunal was not a composite one covering multiple years, but a separate order for the specific assessment year in question. Therefore, the Tribunal's decision to dismiss the Appeal due to the tax effect being below the limit was upheld. The Court refused to condone the delay, as the Appeal lacked merits, leading to the dismissal of the application and the Tax Appeal.

The Court clarified that the dismissal of the Appeal and the application would not affect other pending Appeals where the tax effect exceeded the prescribed limits. It was emphasized that neither the Tribunal nor the Court had made any judgment on the merits of the issues in the Appeal. The decision to dismiss the present application and Appeal was based on the specific circumstances of the case, where the tax effect fell below the monetary limits set by the CBDT. The Court's refusal to condone the delay was to prevent unnecessary harassment to the Assessee and avoid additional expenses incurred in dealing with the delay condonation process. The judgment highlighted the importance of adhering to the prescribed monetary limits for filing Appeals and the need to consider each assessment year separately unless a composite order covering multiple years was issued.