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CBDT revised Monetary Limits For Filing Appeals By tax authorities and direct to withdraw old appeals also: – the question is whether subordinates of CBDT will follow instructions? It is doubtful considering past experience.

CBDT revised Monetary Limits For Filing Appeals By tax authorities and direct to withdraw old appeals also: – the question is whether subordinates of CBDT will follow instructions? It is doubtful considering past experience. - Income Tax - Direct Tax Code - DTC - By: - CA DEV KUMAR KOTHARI - Dated:- 17-12-2015 - Earlier article: The last article on this issue by the same author was Revenue should withdraw appeals in cases of tax effect below present prescribed limits for filing of appeals was we .....

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ls even though they should not have filed because tax effect was not only below the prescribed limits and in many cases tax effect was insignificant. Cases of insubordination: Based on ground realities and past experience, we find that tax authorities are not in habit of following binding circulars and judgments which are in favour of tax payer. We find many cases of insubordination by tax authorities who do not follow instructions of higher authorities. The board is also of view that binding ju .....

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concerned authorities and also on opinion of counsel. The scrutiny of orders under appeal involves working from inspectors to higher authorities and CCIT and / or counsels. However, it is experienced that whenever there is substantial addition made by the AO, the departmental authorities and counsels are ready to fight case up to the Supreme Court, even if there is no merit at all in the case. This practice should come to an end, and this can only be if action of insubordination are reported, e .....

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x 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 filed before CIT (A)/ ITAT/ High Court and the Supreme Court, as the case may be. For each year time and cost are to be spent to handl .....

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year. There seems no logic for this 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. Example: Suppose a CIT(A) hears appeals of same assessee for six years involving some issues common in all years. He passes separate orders for each of appeal and the t .....

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llegal or ultra vires, where Revenue Audit objection in the case has been accepted by the Department, Where the addition relates to undisclosed foreign assets/ bank accounts. Justified exemption: The exception about constitutional validity of any provision of IT Act, IT Rules, notification and circulars is justified because these have impact all over India. However, in such cases also merits must be considered and counsels should not routinely advise to file appeals or review petitions. Not just .....

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view to avoid criticism and for shirking responsibility. Ground reality and experience shows that large portion of action taken based on revenue audit objections fails due to lack of merits and other reasons. Therefore, in such cases also filing of subsequent appeals [(after order of CIT(A)] should be based on merit and not only because audit objection was accepted. Appeal where the addition relates to undisclosed foreign assets/ bank accounts - should also be based on merit after order of CIT(A .....

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ch appeals be withdrawn. In fact, CBDT should have directed in clear terms to withdraw such appeals. However, from the language used in the circular it appears to have been left to the discretion of concerned authority / committee or counsels as the case may be. Recent circular fixing monetary limit is analysed below with highlights added by author: Circular - Income Tax Circular No. 21/2015 F No 279/Misc. 142/2007-ITJ (Pt) Government of India Ministry of Finance Department of Revenue Central Bo .....

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urt were specified. 2. In supersession of the above instruction, it has been decided by the Board that departmental appeals may be filed on merits before Appellate Tribunal and High Courts and SLP before the Supreme Court keeping in view the monetary limits and conditions specified below. 3. Henceforth, appeals/ SLPs shall not be filed in cases where the tax effect does not exceed the monetary limits given hereunder: S No Appeals in Income-tax matters Monetary Limit (in Rs) 1 Before Appellate Tr .....

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spect of the issues against which appeal is intended to be filed (hereinafter referred to as disputed issues ). However the tax will not include any interest thereon, except where chargeability of interest itself is in dispute. In case the chargeability of interest is the issue under dispute, the amount of interest shall be the tax effect. In cases where returned loss is reduced or assessed as income, the tax effect would include notional tax on disputed additions. In case of penalty orders, the .....

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cified in para 3. No appeal shall be filed in respect of an assessment year or years in which the tax effect is less than the monetary limit specified in para 3. In other words, henceforth, appeals can be filed only with reference to the tax effect in the relevant assessment year. However, in case of a composite order of any High Court or appellate authority, which involves more than one assessment year and common issues in more than one assessment year, appeal shall be filed in respect of all s .....

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limit specified above, the Commissioner of Income-tax shall specifically record that even though the decision is not acceptable, appeal is not being filed only on the consideration that the tax effect is less than the monetary limit specified in this instruction . Further, in such cases, there will be no presumption that the Income-tax Department has acquiesced in the decision on the disputed issues. The Income-tax Department shall not be precluded from filing an appeal against the disputed iss .....

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ment year or in the case of any other assessee for the same or any other assessment year, by not filing an appeal on the same disputed issues. The Departmental representatives/counsels must make every effort to bring to the notice of the Tribunal or the Court that the appeal in such cases was not filed or not admitted only for the reason of the tax effect being less than the specified monetary limit and, therefore, no inference should be drawn that the decisions rendered therein were acceptable .....

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