ITO, WARD-2(1), DHANBAD vs. SHRI PRAVIN KUMAR AGARWAL(HUF), DHANBAD

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ITA 285/RAN/2019Status: DisposedITAT Ranchi22 July 2020AY 2015-163 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the appeal filed by the Revenue was not maintainable as the tax effect was below the prescribed monetary limit. The circular was found to be binding on the revenue authorities and applied retrospectively to pending appeals.

What were the facts?

The Revenue filed an appeal against an order concerning penalty proceedings under Section 271(1)(c) of the Income Tax Act for the assessment year 2015-16. The tax effect on the disputed penalty amount was Rs. 1,88,261, which is less than the monetary limit prescribed by CBDT Circular No. 17/2019.

What were the issues?

Whether the Revenue's appeal is maintainable when the tax effect is below the monetary limit specified in the CBDT circular. Whether the exceptions to the circular apply to penalty proceedings.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, RANCHI ‘E-COURT’AT KOLKATA

Before: Shri S.S, Godara, JM & Dr. A.L. Saini, AM

आदेश /O R D E R Per S. S. Godara(Oral): This Revenue’s appeal for assessment year 2015-16 arises against the Commissioner of Income-tax (Appeals), Dhanbad’s order dated 16.10.2019 passed in case No.CIT(A),Jamshedpur/10005/2018-19 involving proceedings u/s 271(1)(c) of the Income Tax Act, 1961; (in short ‘the Act’). Heard both the parties. Case file persued. 2. It is seen at the outset that the tax effect on the disputed penalty amount before us is Rs.1,88,261/- i.e. less than Rs. 50 lacs as per CBDT’s latest Circular No17/2019 dated 08.08.2019. It is pertinent to reproduce the relevant portion of the said Circular as follows:-

1.

Shri Pravin Kumar Agarwal(HUF) Page 2 “2 . As a step toward further management of litigation, it has been decided by the Board that monetary limits for filing of appeals in income-tax cases be enhanced further through amendment in Para 3 of the Circular mentioned above and accordingly, the table for monetary limits specified in Para 3 of the Circular shall read as follows: S.No. Appeals/SLPs in Income-tax matters Monetary Limit (Rs.) 1. Before Appellate Tribunal 50,00,000 2. Before High Court 1,00,00,000 3. Before Supreme Court 2,00,00,000

3. We find that intention behind the Circular No17/2019 dated 08.08.2019 needs to be understood in the following perspective:-

3.

Further, with a view to provide parity in filing of appeals in scenarios where separate order is passed by higher appellate authorities for each assessment year vis- à-vis where composite order for more than one assessment year is passed, para 5 of the circular is substituted by the following para: “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, 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 monetary limit specified 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. Further, even in the case of composite order of any High Court or appellate authority which involves more than one assessment year and common issues in more than one assessments year, 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 case where a composite order/judgment involves more than one assessee, each assessee shall be dealt with separately.”

4.

On perusal of the Circular No. 17/2019 dated 08.08.2019 and the materials available on record, we do not see this case falling under any of the exceptions contemplated in the said circular per se. We also find that this circular makes it very clear that the revised monetary limits shall apply retrospectively to pending appeals as well. Hon’ble apex court in Commissioner of Customs vs Indian Oil Corporation Ltd reported in 267 ITR 272 (SC) has settled the law that CBDT’s circulars are very much binding on revenue authorities. Mr. Mohanti has vehemently argued that the instant issue of bogus long-term capital gains falls as an exception to the above-stated

Shri Pravin Kumar Agarwal(HUF) Page 3 CBDT’s circular, he fails to dispute that the foregoing exception applies to quantum only and not penalty proceedings.

5.

This Revenue’s appeal is dismissed for involving lower than the prescribed minimum tax effect.

Order pronounced in open court on 22/07/2020.

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