ITO 22(1)(3), NAVI MUMBAI vs. MUKESH MOHAN PATEL, MUMBAI

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ITA 4506/MUM/2014Status: DisposedITAT Mumbai22 March 2021AY 2005-063 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal noted that the CBDT circular mandates that appeals with a tax effect below a certain monetary limit should not be filed or should be withdrawn. Since the tax effect in this case was below the prescribed limit, the appeal was dismissed.

What were the facts?

The Revenue filed an appeal before the ITAT against a penalty order. The assessee's representative argued that the 'tax effect' involved in the appeal was below the monetary limit set by the CBDT for filing appeals.

What were the issues?

Whether the appeal filed by the Revenue is maintainable before the ITAT considering the monetary limit prescribed by the CBDT for 'tax effect'.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “B” MUMBAI

For Appellant: Shri Gyaneshwar Kataram, A.R
For Respondent: Shri Tharian Oommen, Sr. D.R, Shri Gyaneshwar Kataram, A.R
Hearing: 22/03/2021Pronounced: 22/03//2021

ORDER

PER RAVISH SOOD, JM:

1.

The captioned appeal filed by the revenue is directed against the order passed by the Commissioner of Income Tax (Appeals)-1, Mumbai [for short „CIT(A)‟], dated 27.03.2014, which in turns arises from the penalty order passed by the A.O under section 271(1)(c) of the Income Tax Act 1961, (for short „Act‟), dated 30.03.2012.

2.

Central Board of Direct Taxes (CBDT) vide Circular No. 17/2019 dated 08.08.2019 has amended Circular No. 3/2018 dated 11.07.2018 for further enhancement of monetary limit for filing of appeals by the Department before the ITAT, High Courts and SLPs/Appeals before Supreme Court as measures for reducing litigation.

3.

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 2 ITO, 22(1)(3) Vs. Mr. Mukesh Mohan Patel 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.

At para 13 of the above Circular, it has been mentioned that:

“13. This Circular will apply to SLPs/appeals/cross objection/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 para 3 above may be withdrawn/not pressed.”

4.

As a step towards further management of litigation, CBDT vide Circular No. 17/2019, dated 08.08.2019 has fixed the monetary limit for filing of appeals before ITAT at Rs.50,00,000/-.

5.

In the instant appeal filed by the Department, it was averred by the ld. A.R that the „tax effect‟ therein involved was below the monetary limit of Rs.50,00,000/-. The said fact was brought to the notice of the ld. Departmental Representative (for short „D.R‟) who did not controvert the same.

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