ITO, NEW DELHI vs. M/S. AQUA HOLDINGS PVT. LTD., NEW DELHI

This appeal by the revenue is directed against the order of the ld. CIT(A)-I, New Delhi dated 31.03.2015 pertaining to AY 2005- 06.

2.0 The revenue is aggrieved by order of the ld. Commissioner of Income Tax(A) in quashing the notice u/s 148 and the assessment thereof when the Assessing Officer had recorded his satisfaction ITA 3716/Del/2015 AY: 2011-12 and this recording had been endorsed by the ACIT as per provisions of the Income Tax Act, 1961 (hereinafter called 'the Act').

2.1 A perusal of the grievance of the revenue shows that the tax effect would be less than Rs. 50 lakhs and hence the appeal has to be dismissed in the light of the CBDT Circular No. 17/2019 dated 08.08.2019.

2.2 The ld. DR vehemently stated that this Circular is not applicable to the existing appeals as it is prospective in nature.

2.3 In our considered opinion, the language of the Circular 17/2019 dated 08.08.2019 clearly shows that it has referred to the earlier Circular 3/2018 and its amendment dated 20.08.2018 vide which monetary limit for filing of income tax appeals by the department before the ITAT, Hon’ble High Court, SLP/and appeals before the Hon’ble Supreme Court have been specified. It would be pertinent to refer to the Circular no. 17/2019 which reads as under:-

"Circular No. 17/2019 New Delhi. 8th August 2019

Subject: - Further Enhancement of Monetary limits for filing of appeals by the Department before Income Tax Appellate Tribunal, High Courts and SLPs/appeals before Supreme Court - Amendment to Circular 3 of 2018 - Measures for reducing litigation.- ITA 3716/Del/2015 AY: 2011-12 Reference is invited to the Circular No.3 of 2018 dated 11.07.2018 (the Circular) of Central Board of Direct Taxes (the Board) and its amendment dated 20th August. 2018 vide which monetary limits for filing of income tax appeals by the Department before Income Tax Appellate Tribunal. High Courts and SLPs/ appeals before Supreme Court have been specified. Representation has also been received that an anomaly in the said circular at para 5 may be removed.

S.No. Appeals/SLPs in IT matters Monetary Limit (Rs.)

"5. The Assessing Officer shall calculate the tax effect separately for every assessment year in respect of the disputed issues in the case of every assessee. If, in the case of an assessee, the disputed issues arise in more than one assessment year, appeal can be filed in respect of such assessment year or years in which the tax effect in respect of the disputed issues exceeds the monetary limit specified in para 3. No appeal shall be filed in respect of an assessment year or years in which the tax effect is less than the monetary limit specified in para 3. Further, even in the case of composite order of any High Court or appellate 3 ITA 3716/Del/2015 AY: 2011-12 authority which involves more than one assessment year and common issues in more than one assessment year, no appeal shall be filed in respect of an assessment year or years in which the tax effect is less than the monetary limit specified in para 3. In case where a composite order/ judgement involves more than one assessee. each assessee shall be dealt with separately."

4. The said modifications shall come into effect from the date of issue of this Circular.

3.0 As mentioned elsewhere by Circular 17/2019, the CBDT has further enhanced the monetary limit for filing of appeals and the same is amendment to Circular 3/2018. We find that Clause 13 of Circular 3/2018 reads as under:

"The Circular will apply to SLPs/ appeals/ cross objections/ references to be filed henceforth in Hon'ble Supreme Court/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.”

3.1 In light of the above, we are of the considered opinion that Circular No. 17/2019 shall also apply retrospectively to pending ITA 3716/Del/2015 AY: 2011-12 appeals. In that view of the matter, the appeal filed by the Revenue stands dismissed.

Order pronounced in the open court on 29th August, 2019.