What did the Tribunal hold?

The Tribunal held that as per CBDT Circular No. 3 of 2018, appeals with a tax effect not exceeding Rs. 20 lacs should be dismissed or withdrawn. The Revenue's appeal was therefore dismissed as not maintainable.

The Revenue filed an appeal before the ITAT against an order of the CIT(A) for AY 2003-04. The tax effect in the appeal was less than Rs. 20 lacs.

What were the issues?

Whether the Revenue's appeal should be dismissed based on the monetary limit prescribed by CBDT Circular No. 3 of 2018 for pending appeals.

DCIT vs Labh Construction & Industries… | ITAT Ahmedabad 2019

Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD

Before: SHRI MAHAVIR PRASAD & SHRI WASEEM AHMED

For Respondent: Shri Lalit P. Jain, Sr.DR

Pronounced: 11/03/2019

आदेश / O R D E R

PER WASEEM AHMED, ACCOUNTANT MEMBER: The captioned appeal has been filed at the instance of the Revenue against the order of the Commissioner of Income Tax (Appeals)–2, Ahmedabad [CIT(A) in short] vide appeal no.CIT(A)-2/DCIT, Cir.4/117/13-14 dated 30/04/2015 arising in the assessment order passed under s.143(3) of the Income Tax Act, 1961(hereinafter referred to as "the Act") dated 27/03/2006 relevant to Assessment Year (AY) 2003-04.

At the time of the hearing, we observe that the tax effect in the appeal filed by the Revenue is less than Rs. 20 lacs. As per the Circular

ITA No.2157/Ahd/2015 DCIT vs.Labh Construction & Industries Ltd. Asst.Year - 2003-04

- 2 - No. 3 of 2018 dated 11/07/2018 issued by CBDT recently all pending appeals filed by Revenue are liable to be dismissed/ withdrawn/ not pressed to reduce the litigation where the tax effect does not exceed the prescribed monetary limit, i.e., Rs.20 Lacs. The relevant extract of the circular is reproduced below: “2. In supersession of the above Circular, it has been decided by the Board that departmental appeals may be filed on merits before Income Tax Appellate Tribunal and High Courts and SLPs/ appeals before 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. Appeals/ SLPs in Income-tax matters Monetary Limit No. (Rs.) 1. Before Appellate Tribunal 20,00,000 2. Before High Court 50,00,000 3. Before Supreme Court 1,00,00,000

The monetary limit for filing the appeals by the Revenue before the Tribunal has been increased to Rs. 20 Lacs. It is also clarified in the said Circular that the said monetary limit is applicable retrospectively even to the appeals pending before the Tribunal. The CBDT has also instructed that such pending appeals below this specified tax limit of Rs.20 lacs may be withdrawn / not pressed.

In the case on hand, it was noticed that the tax effect on the disputed issues raised by the Revenue is claimed to be less Rs.20 Lacs. Therefore appeal of the Revenue is required to be dismissed in limine in terms of the above circular.

ITA No.2157/Ahd/2015 DCIT vs.Labh Construction & Industries Ltd. Asst.Year - 2003-04

- 3 - 3. The Ld. DR for the Revenue fairly agreed on the applicability of the CBDT Circular No. 3 of 2018. Accordingly, the appeal of the Revenue is dismissed as not maintainable. However, the Revenue is on the liberty to move the miscellaneous application to recall the order if the tax effect exceeds the threshold limit or the case of the Revenue falls in any of the exception provided in the aforesaid CBDT Circular in any manner. The MA shall be filed within the prescribed time. Hence the appeal of the Revenue is dismissed.

In the result, the appeal filed by the department is dismissed. This Order pronounced in Open Court on 11/03/2019

Sd- Sd/- (MAHAVIR PRASAD) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER

Ahmedabad; Dated 11/03/2019 ट�.सी.नायर, व.�न.स./T.C. NAIR, Sr. PS आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त(अपील) / The CIT(A)-2, Ahmedabad �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 5. 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, स�या�पत ��त //True Copy// उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील�य अ�धकरण, अहमदाबाद / ITAT, Ahmedabad

THE DCIT, CIRCLE-4, AHMEDABAD vs. LABH CONSTRUCTION & INDUSTRIES LTD., AHMEDABAD

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