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Revenue should withdraw appeals in cases of tax effect below present prescribed limits for filing of appeals

Revenue should withdraw appeals in cases of tax effect below present prescribed limits for filing of appeals - Income Tax - Direct Tax Code - DTC - By: - CA DEV KUMAR KOTHARI - Dated:- 22-9-2015 - ALEXANDER GEORGE Versus COMMISSIONER OF INCOME-TAX 2015 (8)TMI 519 - SUPREME COURT COMMISSIONER OF INCOME-TAX AND ANOTHER Versus CENTURY PARK 2015 (8) TMI 522 - SUPREME COURT Article -Honourable Supreme Court refused to entertain the appeal of assessee due to low tax effect- with due respect, author fe .....

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n No. 5/2014 F No 279/Misc. 142/2007-ITJ (Pt) dated 10.07.2014 revised limit for filing appeals is for each year. As per Circular tax effect for each year is to be considered. Even if appeals are being filed for more than one year and in one year tax effect is higher than for only that year appeal is required to be filed and not for other years in which revenue effect is less than applicable limit. In view of the author each year is separate and for each year separate appeal is required to be fi .....

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is view. Because as discussed earlier each year involves separate appeal, even in case of Composite order , each year will entail time and costs. The concerned Court and counsel of revenue and assessee both will have to go through all orders beginning from assessment order in respect of all years. In view of author, even if more than one appeal is being filed and / or considered at the same time, tax effect for each year should be considered and not total figure for all years. One more reason is .....

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x effect is less than present prescribed limit, will lead to reduce unproductive work and avoid spending of public money. With withdrawal of such appeals, courts will be relieved of many pending cases. Withdrawal of such smaller appeals will lead to more objectivity in litigation management and Courts will be able to devote more time on appeals involving larger amount. Even appeal of assessee was dismissed as revenue effect was low: In case of ALEXANDER GEORGE (supra.) appeal of assessee was dis .....

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withdrawal of appeal should be in discretion of appellant and Courts should not dismiss appeal of appellant whether appellant be revenue or tax payer. This is because Courts are to render justice. Once an appeal is filed, the Court must decide the appeal based on merits of the case. Even in absence of appellant and / or respondents, to render justice, Court can decide the appeal based on material available. Approach should be forward looking: There is no objectivity and purpose in continuing li .....

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e said that even if appeal was filed in past, the maintainability of appeal should be considered in view of present limit. This is because limits have been increased due to reasons like (a) inflation (b) increasing costs in handling appeals and (c) increased exemption limit or reduced tax rates and (d) passage of long time between previous year and consideration of appeal. However, as stated earlier, the Courts should not dismiss appeals due to lower tax effect it should be discretion of appella .....

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h July, 2014 To All Chief Commissioners of Income-tax and All Directors General of Income-tax Subject: Revision of monetary limits for filing of appeals by the Department before Income Tax Appellate Tribunal, High Courts and Supreme Court - measures for reducing litigation - Reg - Sir/Madam, Reference is invited to Board's instruction No 3/2011 dated 09/02/2011 wherein monetary limits and other conditions for filing departmental appeals (in Income-tax matters) before Appellate Tribunal, High .....

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Tribunal 4,00,000/- 2. U/s 260 A before High Court 10,00,000/- 3. Before Supreme Court 25,00,000/- It is clarified that an appeal should not be filed merely because the tax effect in a case exceeds the monetary limits prescribed above. Filing of appeal in such cases is to be decided on merits of the case. 4. For this purpose, tax effect means the difference between the tax on the total income assessed and the tax that would have been chargeable had such total income been reduced by the amount o .....

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ty orders, the tax effect will mean quantum of penalty deleted or reduced in the order to be appealed against 5. The Assessing Officer shall calculate the tax effect separately for every assessment year in respect of the disputed issues in the case of every assessee. If, in the case of an assessee, the disputed issues arise in more than one assessment year, appeal, can be filed in respect of such assessment year or years in which the tax effect in respect of the disputed issues exceeds the monet .....

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pect of all such assessment years even if the 'tax effect' is less than the prescribed monetary limits in any of the year(s), if it is decided to file appeal in respect of the year(s) in which 'tax effect' exceeds the monetary limit prescribed. In case where a composite order / judgement involves more than one assessee, each assessee shall be dealt with separately. 6. In a case where appeal before a Tribunal or a Court is not filed only on account of the tax effect being less tha .....

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e disputed issues in the case of the same assessee for any other assessment year, or in the case of any other assessee for the same or any other assessment year, if the tax effect exceeds the specified monetary limits. 7. In the past, a number of instances have come to the notice of the Board, whereby an assessee has claimed relief from the Tribunal or the Court only on the ground that the Department has implicitly accepted the decision of the Tribunal or Court in the case of the assessee for an .....

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re acceptable to the Department. Accordingly, they should impress upon the Tribunal or the Court that such cases do not have any precedent value. As the evidence of not filing appeal due to this instruction may have to be produced in courts, the judicial folders in the office of CsIT must be maintained in a systemic manner for easy retrieval. 8. Adverse judgments relating to the following issues should be contested on merits notwithstanding that the tax effect entailed is less than the monetary .....

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