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Income Tax Appellate Tribunal, DELHI BENCH: ‘C’, NEW DELHI
Before: SHRI BHAVNESH SAINI & SHRI O.P. KANT
PER O.P. KANT, A.M.: The present appeal by the Revenue is directed against order dated 23.09.2016 passed by learned CIT(A)-23, New Delhi, for assessment year 2010-11. 2. At the outset, the learned counsel for the assessee submitted that the tax effect involved in the appeal of the Revenue is below the threshold amount of tax effect of filing appeal which has been revised to Rs.50 lakhs by the CBDT vide Circular No.17/2019, dated 8th August, 2019, therefore, the appeal may be dismissed as infructuous.
3. On the contrary, the learned DR though agreed that the tax effect involved in the appeal is below the threshold amount of tax effect of Rs.50, lakhs. However, submitted that said circular should be read as prospective in nature and not applicable over the appeals already filed by the Revenue.
We have heard the rival submissions of the parties on the issue in dispute. We find that the Central Board of Direct Taxes (CBDT), New Delhi, under litigation management exercise has specified monetary limit of tax amount for filing appeal by the Income Tax Department before various appellate forums. In this regard, the CBDT issued Circular No. 3 of 2018 on 11.07.2018 in suppression of earlier Circular No. 21 of 2015 dated 10.12.2015. The relevant para of Circular No. 3/2018 are reproduced as under: “2. In supersession of the above Circular, it has been decided by the Board that departmental appeals may be filed on merits before Income Tax Appellate Tribunal and High Courts and SLPs/ appeals before Supreme Court keeping in view the monetary limits and conditions specified below. 3. Henceforth, appeals/SLPs shall not be filed in cases where the tax effect does not exceed the monetary limits given hereunder: S. Appeals/SLPs in Income-tax Monetary Limit No. matters (Rs.) 1. Before Appellate Tribunal 20,00,000/- 2. Before High Court 50,00,000/- 3. Before Supreme Court 1,00,00,000/- It is clarified that an appeal should not be filed merely because the tax effect in a case exceeds the monetary limits prescribed above. Filing of appeal in such cases is to be decided on merits of the case. 4. ……….. 5. ………. 6. ……….
7. ………. 8. ……….. 9. ……….. 10. …….. 11. …….. 12. ……… 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 para 3 above may be withdrawn/ not pressed.” 4.1 Thus, the circular directed the department to withdraw the pending appeals or not to be pressed. This circular was amended on 20.08.2018 to modify para 10 to exclude certain category of appeals though below the prescribed tax effect, as under: “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. ”
4.2 Recently, the CBDT vide circular No.17/2009, dated 8th August, 2019 has enhanced the prescribed limit of filing appeal before various forums modifying the Para-3 of Circular No. 3/2018, dt. 11.07.2018 as under: “Reverence 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 Court 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.
As a step towards further management of litigation, it has been decided by the Board that monetary' limits for tiling 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: S. No. Appeals/SLPs in Income-tax Monetary Limit (Rs.) matters Before Appellate Tribunal 50,00,000 1. Before High Court 2. 1,00,00,000 3. Before Supreme Court 2,00,00,000
…………………………… 4. The said modifications shall come into effect from the date of issue of this Circular.” 4.3 In view of para-4 of the Circular No. 17/2019, the contention of Ld. DR is that this circular should not apply on pending appeal and the circular will be applicable prospectively. 4.4 We find that CBDT by way of Circular No. 17/2019 has only modified para 3 of Circular No. 3/2018 enhancing the monetary limit of tax effect for filing the appeals before appellate forums and the other paras of CBDT Circular No. 3 of 2018, dated 11.07.2018 and its amendment dated 20th August, 2018 are still effective and in operation. As the said Circular no. 3/2018 is retrospective in nature and the present Circular has only modified the monetary limit of the tax effect for filing the appeal, the contentions of learned DR are not accepted. 4.5 The coordinate Bench of Tribunal in (AY: 1998-99) along with other appeals, has held that Circular No. 17/2019 is applicable over the pending appeals also. The relevant part of the decision is reproduced as under: “7. In view of the above discussion, 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.” 5. In view of aforesaid discussion, the present appeal of the Revenue, having tax effect below Rs.50.00 lakhs and pending as on the date of issue of Circular (supra), is liable to be dismissed, with liberty to the Revenue for filing application for recall of the order, if case falls in any of the category prescribed in Para 10 of Circular No.3/2018 as amended as on 20.08.2018. We order accordingly. 6. In the result, the appeal of Revenue is dismissed. Order is pronounced in the open court on 3rd September, 2019.