What did the Tribunal hold?

The Tribunal noted that the tax effect in all the appeals was below the revised monetary limit of Rs. 50,00,000/- as per CBDT Circular No. 17/2019. The Departmental Representative also conceded to this fact.

The Revenue filed appeals before the ITAT against the orders of the CIT(A) for assessment years 2003-04, 2007-08, and 2008-09. The assessee argued that the tax effect in these appeals was below the monetary limit prescribed by CBDT circulars for filing appeals.

What were the issues?

Whether the Revenue's appeals should be dismissed based on the monetary limit for tax effect prescribed by CBDT circulars for filing appeals before the ITAT.

DCIT vs Konkan Polymers & Additives P.Ltd | ITAT Mumbai 2020

Income Tax Appellate Tribunal, MUMBAI BENCH “H” MUMBAI

Before: SHRI MAHAVIR SINGH & SHRI N.K. PRADHAN

For Appellant: Mr. J.D. Mistri&, Mr. Dharmesh Shah, ARs

For Respondent: Mr. R. Bhoopathi, DR, Mr. J.D. Mistri&, Mr. Dharmesh Shah, ARs

Hearing: 19/10/2020Pronounced: 21/10/2020

M/s Konkan Polymers 2 & Ors. ORDER PER N.K. PRADHAN, A.M. The captioned appeals filed by the Revenue are directed against the order of the Commissioner of Income Tax (Appeals)-9/20, Mumbai and arise out of the assessment completed u/s 143(3) of the Income Tax Act 1961 (the ‘Act’). As common issues are involved, we are proceeding to dispose them off by this consolidated order for the sake of convenience.

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 Revenue before the ITAT, High Courts and SLPs/Appeals before Supreme Court as measures for reducing litigation.

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 purchase, ‘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

M/s Konkan Polymers 3 & Ors. 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 said 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.”

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

As filed by the Ld. counsel for the assessee, the tax effect with respect to the Departmental appeal is as under :-

Particulars AY. 2003-04 A.Y. 2007-08 A.Y. 2008-09 (Rs.) (Rs.) (Rs.) Disallowance made by the 1,21,91,200/- 73,18,420/- 32,99,188/- Assessing Officer in the assessment order (A)

Less : Addition sustained by Ld. -- -- -- CIT(A) (B)

Relief given by the Ld. CIT(A) in 1,21,91,200/- 73,18,420/- 32,99,188/- respect of which department is in appeal. (C=A-B) Tax Payable 42,66,920/- 21,95,526/- 9,89,756/-

Add: Education Cess 2,13,346/- 6,04,801/- 29,693/-

Tax impact 44,80,266/- 28,00,327/- 10,19,449/-

M/s Konkan Polymers 4 & Ors. Less: Tax paid u/s. 115JB of the Act (-) 10,09,360/- on the returned income

Balance tax effect 34,70,906/- 28,00,327/- 10,19,449/-

Thus in the aforementioned appeals, the consequential tax effect is less than Rs.50,00,000/-. Therefore, the Ld. counsel for the assessee submits that the appeal filed by the Revenue be dismissed. The Ld. Departmental Representative (DR) fairly agrees that the tax effect herein is below the monetary limit of Rs.50,00,000/- fixed by the above Circular for filing of appeals before the ITAT.

In view of the CBDT Circular No. 17/2019, these appeals involving tax effect of less than Rs.50,00,000/- are dismissed as withdrawn.

Order pronounced through notice board under rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963.

DCIT 9(2), MUMBAI vs. KONKAN POLYMERS & ADDITIVES P.LTD, MUMBAI

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