DY. COMMISSIONER OF INCOME TAX, C-6(1), MOHALI vs. M/S TAJ TRAVELS PVT. LTD.,, MOHALI

During the course of hearing the Ld. Counsel for the Assessee contended that the appeal filed by the Department is not maintainable in view of the Circular No. 17/2019 dt. 08/08/2019 issued by CBDT wherein the monetary limit for filing the appeals by the Department before the ITAT has been increased to Rs. 50,00,000/- from Rs. 20,00,000/-.

In the rival submissions the Ld. CIT DR submitted that the Circular No. 17/2019 dt. 08/08/2019 is not clearly retrospective in as much as it specifically states in para 4 that “ the said modification shall come into effect from the date of issue of this Circular” It was stated that the aforesaid sentence clearly gives an impression that the said Circular is applicable after the date mentioned there in and thereafter the departmental appeals which come in the specified tax effect limit will not be filed. The Ld. Counsel for the Assessee vehemently opposed the contention of the Ld. CIT(DR) and said that the Circular must be held to have retrospective application and must equally apply to the pending appeals as well, since the present Circular only modifies the monetary limit earlier mentioned in Circular No. 3 of 2018 dt. 11/07/2018.

We have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case it is an admitted fact that the CBDT vide Circular No. 17/2019 enhanced the monetary limit to Rs. 50,00,000/- for not filing the appeal by the department before the ITAT, earlier this limit was specified at Rs. 20,00,000/- in the original Circular no. 03/2018 dt. 11/07/2018. Now vide the new Circular no. 17/2019 dt. 08/08/2019 the Tax Effect limit has been enhanced and this new Circular dt. 08/08/2019 read as under;

From the contents of the aforesaid Circular it is crystal clear that the anomaly in the earlier Circular no. 3 of 2018 dt. 11/07/2018 at page 5 has been removed and the limit specified in para 3 of the earlier Circular has been enhanced. It is also not in dispute that the earlier Circular was applicable retrospectively to the pending appeals / cross objections and para nos. 12 & 13 of the original Circular no. 03/2018 dt. 11/07/2018 read as under:

It is clarified that the monetary limit of Rs. 20 lakhs for filing appeals before the IT AT would apply equally to cross objections under section 253(4) of the Act. Cross objections below this monetary limit, already filed, should be pursued for dismissal as withdrawn/ not pressed. Filing of cross objections below the monetary limit may not be considered henceforth. Similarly, references to High Courts and SLPs/ appeals before Supreme Court below the monetary limit of Rs. 50 lakhs and Rs. 1 Crore respectively should be pursued for dismissal as withdrawn/ not pressed. References before High Court and SLPs/ appeals below these limits may not be considered henceforth. 13. This Circular will apply to SLPs/ appeals/ cross objections/ references to be filed henceforth in SCIHCs/Tribunal and it shall also apply retrospectively to pending SLPs/ appeals/ cross objections/references. Pending appeals below the specified tax limits in pare 3 above may be withdrawn/ not pressed.

Now the CBDT simply enhanced the monitory limit and the directions given earlier vide para nos. 12 & 13 of the Circular no. 3 / 2018 dt. 11/07/2018 are still intact which is crystal clear from the language of the Circular no. 17/2019 wherein it has been mentioned that there is enhancement of monetary limit and amendment to Circular no. 3 /2018 for reducing the litigation. We therefore are of the confirmed view that the amended Circular No. 17/2019 now issued by the CBDT is also applicable to the pending appeals as has been specified in para 13 of the original Circular no. 3/2018 dt. 11/07/2018 and that the Department ought not have filed the appeals before the ITAT where the tax effect is Rs. 50 Lacs or less. For the aforesaid view we are also fortified by the decision dt. 14/08/2019 of the coordinate Bench i.e; ITAT, Ahmedabad Bench ‘A’ Ahemdabad in ITA No. 1398/Ahd/2004 for the A.Y. 1998-99 in the case of ITO, Ward-3(2) Ahmedabad Vs. Dinesh Madhavlal Pate, Ahmedabad& others wherein it has been held in para 5 to 7 as under:

Having considered the rival submissions and having perused the material on record, we do not have slightest of hesitation in holding that the concession extended by the CBDT not only applies to the appeals to be filed in future but it is also equally applicable to the appeals pending for disposal as on now. Our line of reasoning is this. The circular dated 8th August 2019 is not a standalone circular. It is to be read in conjunction with the CBDT circular no 3 of 2018 (and subsequent amendment thereto), and all it does is to replace paragraph nos. 3 and 5 of the said circular. This is evident from the following extracts from the circular dated 8th August 2019: 2. As a step towards 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:

Clearly, all other portions of the circular no. 3 of 2018 (supra) have remained intact. The portion which has remained intact includes paragraph 13 of the aforesaid circular which is as follows: 13. This Circular will apply to SLPs/ appeals/ cross objections/ references to be filed henceforth in SC/HCs/Tribunal and it shall also apply retrospectively to pending SLPs/ appeals/ cross objections/references. Pending appeals below the specified tax limits in pare 3 above may be withdrawn/ not pressed. 7. In view of the above discussions, we hereby hold that the relaxation in monetary limits for departmental appeals, vide CBDT circular dated 8th August 2019 (supra) shall be applicable to the pending appeals in addition to the appeals to be filed henceforth.

In view of the aforesaid discussion the appeal filed by the Department is dismissed.