ITO, WARD-3(4), THANE vs. M/S VISHWAKARMA & COMPANY, THANE

The present filed by the revenue is directed against the order passed by the CIT(A)-2, Thane, which in turn arises from the penalty order u/s 271(1)(c) of the Act passed by the A.O for A.Y. 2010-11 for levying penalty of Rs.46,598/-.

After taking into consideration the tax effect of Rs.46,598/- involved in this case it is noticed that Central Board of Direct Taxes (CBDT) vide Circular No. 17/2019 dated 08.08.2019 has amended

CBDT vide Circular No. 3/2018 dated 11.07.2018 has specified that appeals shall not be filed before the Income Tax Appellate Tribunal (ITAT) in cases where the tax effect does not exceed the monetary limit of Rs.20,00,000/-. 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 of income in respect of issues against which appeal is intended to be filed. Further, ‘tax effect’ shall be taxes including applicable surcharge and cess. 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 order, the tax effect will mean quantum of penalty deleted or reduced in the order to be appealed against.

In the instant appeal filed by the Department, the tax effect involved is below the monetary limit of Rs.50,00,000/-.

The revenue shall be at liberty to point out the exceptions and to seek recall the dismissal of appeal and restoration of the appeal in case it can be shown that the appeal is covered by the exceptions.

With the above observations, the appeal of the Revenue involving tax effect of Rs.46,598/- which is less than Rs.50,00,000/- stand dismissed.