What did the Tribunal hold?

The Tribunal held that as per departmental instructions (Circular No. 3/2018), appeals with a tax effect below Rs. 20 lakhs should not be filed or should be withdrawn. Therefore, the appeal was dismissed without going into the merits.

The Revenue filed an appeal before the ITAT against an order of the CIT(A) for AY 2010-11. During the hearing, it was admitted that the tax effect involved in the appeal was less than Rs. 20 lakhs.

What were the issues?

Whether an appeal filed by the Revenue with a tax effect below the prescribed monetary limit should be dismissed in accordance with departmental instructions.

DCIT vs M/S. Magnum Sea Foods Ltd… | ITAT Cuttack 2019

Income Tax Appellate Tribunal, CUTTACK BENCH, CUTTACK

Before: SHRI CHANDRA MOHAN GARG, JM & SHRI L.P. SAHU, AM

For Respondent: Shri Subhendu Dutta, DR, Shri P.R.Mohanty, Advocate

Hearing: 16/07/2019Pronounced: 16/07/2019

आयकर अपीऱीय अधिकरण, कटक न्यायपीठ,कटक IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH, CUTTACK श्री चन्द्र मोहन गगग, न्द्याययक सदस्य एवं श्री एऱ.ऩी.साहु, ऱेखा सदस्य के समऺ । BEFORE SHRI CHANDRA MOHAN GARG, JM AND SHRI L.P. SAHU, AM आयकर अऩीऱ सं./ITA No.123/CTK/2017 (नििाारण वषा / Assessment Year :2010-2011) DCIT, Corporate Circle-1(1), Vs. M/s Magnum Sea Foods Bhubaneswar Ltd., 132-A, Sector-A, Zone-A, Mancheswar Industrial Estate, Bhubaneswar-751010 स्थायी ऱेखा सं./ जीआइआर सं./ PAN/GIR No. : AAACO 4833 G (अऩीऱाथी /Appellant) (प्रत्यथी / Respondent) ..

राजस्व की ओर से /Revenue by : Shri Subhendu Dutta, DR यनधागररती की ओर से /Assessee by : Shri P.R.Mohanty, Advocate

सुनवाई की तारीख / Date of Hearing : 16/07/2019 घोषणा की तारीख/Date of Pronouncement : 16/07/2019 आदेश / O R D E R Per L.P.Sahu, AM: This appeal is filed by the Revenue against the order passed by learned CIT(A)-1, Bhubaneswar for the assessment year 2010-11. 2. Heard both the parties and perused the record. 3. During the course of hearing, the Ld. DR submitted that there is no doubt that tax effect involved in the appeal is less than Rs.20 lakhs, thus, bound by the departmental instruction, the appeal has to be withdrawn. However, attention was invited to para 10 of the Circular No. 3/2018, dated 11th July, 2018, which has been modified by Circular dated 20th

2 ITA No.123/CTK/2017 August, 2018 and in terms of the said modification the Departmental Representatives made a prayer that permission to pray for recall of the order may be granted in case any of the conditions in the reports made available by the A.O. subsequently, show that the issues were required to be contested. The modified para is extracted hereunder: “10. Adverse judgments relating to the following issues should be contested on merits notwithstanding that the tax effect entailed is less than the monetary limits specified in para 3 above or there is no tax effect: (a) Where the Constitutional validity of the provisions of an Act or Rule is under challenge, or (b) Where Board's order, Notification, Instruction or Circular has been held to be illegal or ultra vires, or (c) Where Revenue Audit objection in the case has been accepted by the Department, or (d) Where addition relates to undisclosed foreign income/undisclosed foreign assets (including financial assets)/ undisclosed foreign bank account. (e) Where addition is based on information received from external sources in the nature of law enforcement agencies such as CBI/ED/DRI/SFIO/ Directorate General of GST Intelligence (DGGI). (f) Cases where prosecution has been filed by the Department and is pending in the Court. ”

Going by the prescription of Circular No. 3/2018, dated 11th July, 2018, we are of the view that the Revenue should have either not filed the instant appeal before the Tribunal or withdrawn the same as the tax effect in the appeal is admittedly less than the prescribed limit, i.e., Rs. 20,00,000/- for not filing the appeals. Accordingly, we dismiss the appeal filed by the Revenue without going into merits of the case. However, it is made clear that the Department is at liberty to file Miscellaneous

3 ITA No.123/CTK/2017 Application, if the tax effect is found to be more than the prescribed limit of Rs.20,00,000/- or any of the conditions etc., as available in the amendment carried out in para 10 of Circular No. 3/2018, dated 20.08.2018, is made out. Accordingly, the appeal of the Revenue deserves to be dismissed. 5. In the result, the appeal of the Revenue is dismissed. Order pronounced in the open court on 16/07/2019. Sd/- Sd/- (C.M.GARG) (L.P.SAHU) न्यानयक सदस्य / JUDICIAL MEMBER ऱेखा सदस्य / ACCOUNTANT MEMBER कटक Cuttack; ददनांक Dated 16/07/2019 प्र.कु.मम/PKM, Sr.P.S. आदेश की प्रनिलऱपप अग्रेपषि/Copy of the Order forwarded to : 1. अऩीऱाथी / The Appellant- . DCIT, Corporate Circle-1(1), Bhubaneswar प्रत्यथी / The Respondent- 2. M/s Magnum Sea Foods Ltd., 132-A, Sector-A, Zone-A, Mancheswar industrial Estate, Bhubaneswar-751010 3. आयकर आयुक्त(अऩीऱ) / The CIT(A), 4. आयकर आयुक्त / CIT ववभागीय प्रयतयनधध, आयकर अऩीऱीय अधधकरण, कटक / DR, ITAT, Cuttack 5. गार्ग पाईऱ / Guard file. 6. सत्यावऩत प्रयत //True Copy// आदेशािुसार/ BY ORDER,

(Senior Private Secretary) आयकर अपीऱीय अधिकरण, कटक / ITAT, Cuttack

DCIT, CORPORATE CIRCLE-1(1), BHUBANESWAR vs. M/S. MAGNUM SEA FOODS LTD., BHUBANESWAR

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