What did the Tribunal hold?

The Tribunal noted that the CBDT Circular No. 17/2019 increased the monetary limit for filing appeals before the ITAT to Rs. 50,00,000/-. Since the tax effect in this appeal was below this limit, the appeal was dismissed.

The Revenue filed an appeal before the ITAT against an order of the CIT(A). The tax effect on the disputed amount was calculated to be Rs. 44,08,462/-.

What were the issues?

Whether the Revenue's appeal should be entertained given the tax effect is below the revised monetary limit prescribed by CBDT circulars for filing appeals before the ITAT.

It0 25(3) vs Minal Bharat Patel | ITAT Mumbai 2019

Income Tax Appellate Tribunal, MUMBAI BENCH “D” MUMBAI

Before: SHRI C.N. PRASAD & SHRI N.K. PRADHAN

For Appellant: Mr. Kumar Kale,AR

For Respondent: Ms. Jothilakshmi Nayak, DR, Mr. Kumar Kale,AR

Hearing: 26/09/2019Pronounced: 25/10/2019

ORDER PER N.K. PRADHAN, AM The captioned appeal filed by the Revenue is directed against the order of the Commissioner of Income Tax (Appeals)-37, Mumbai (in short ‘CIT(A)’) and arises out of the assessment order passed u/s 143(3) of the Income Tax Act 1961, (the ‘Act’).

Central Board of Direct Taxes (CBDT) vide Circular No. 17/2019 2. 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 ITA 6061/MUM/2018/A.Y. 2014-15 Minal Bharat Patel 2 Department 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 3. 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 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.

ITA 6061/MUM/2018/A.Y. 2014-15 Minal Bharat Patel 3 As a step towards further management of litigation, CBDT vide 4. Circular No. 17/2019 has fixed the monetary limit for filing of appeals before ITAT at Rs.50,00,000/-.

In the instant appeal filed by the Department, the tax effect on the amount in dispute is Rs.44,08,462/-. Therefore, the Ld. counsel for the assessee submits that the appeal filed by the Department be dismissed.

Before us, the Ld. DR also agrees that the tax effect herein is Rs.44,08,462/- as per the computation dated 25.09.2019 filed by the Assessing Officer.

In view of the CBDT Circular No. 17/2019, this appeal involving tax effect of less than Rs.50,00,000/- is dismissed as withdrawn.

IT0 25(3), MUMBAI vs. MINAL BHARAT PATEL, MUMBAI

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