What did the Tribunal hold?

The Tribunal noted that the tax effect was below the revised monetary limit of Rs.50 lakhs for filing appeals by the Department. Therefore, the appeal was not maintainable.

The Revenue filed an appeal before the ITAT challenging an order of the ACIT(Appeals). The tax effect in dispute was Rs.39,19,587.

What were the issues?

The primary issue was whether the Revenue's appeal was maintainable given the tax effect was below the prescribed monetary limit set by CBDT circulars.

ACIT vs M/S Interwoven Software Services… | ITAT Bangalore 2019

Income Tax Appellate Tribunal, BANGALORE BENCHES “ A ” BENCH: BANGALORE

Before: SHRI N.V. VASUDEVAN & SHRI VIKRAM SINGH YADAV

For Respondent: Shri C.H. Sundar Rao, CIT (D.R)

Hearing: 12.09.2019Pronounced: 13.09.2019

O R D E R

PER SHRI VIKRAM SINGH YADAV, AM :

This is an appeal filed by the Revenue against the order of Assistant Commissioner of Income Tax (Appeals), Circle 3(1)(1), Bangalore Dt.28.01.2016 for Asst. Year 2011-12 and the cross 2 IT(T.P)A No.574/Bang/2016 C.O. No.36/Bang/2018 objection (C.O) filed by the assessee supporting the order of the ACIT. As per the grounds of appeal

, tax effect in respect of relief granted by the ACIT which has been challenged in the present appeal comes to Rs.39,19,587.

2. We have heard the ld. DR as well as ld. AR. At the outset, we note that tax effect in this appeal is not exceeding the monetary limit as revised by the CBDT vide Circular No.17/2019 Dt.8.8.2019 for the purposes of filing of appeal by the Department before the ITAT from Rs.20 lakhs to Rs.50 lakhs. For ready reference, we reproduce the CBDT Circular No.17/2019 Dt.8.8.2019 as under: 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.

Circular No. 3/2018 dated 11th July 2018 has been replaced by Circular No. 17/2019 dated 8th August 2019 to enhance Monetary limits for filing of appeals by the Department before Income Tax Appellate Tribunal, High Courts and SLPs/appeals before Supreme Court for reducing litigation. Appeals/SLPs in Income- Monetary Limit (Rs.) Monetary Limit (Rs.) tax matters (previous limit) (Revised Limit) Before Appellate Tribunal 20,00,000 50,00,000 Before High Court 50,00,000 1,00,00,000 Before Supreme Court 1,00,00,000 2,00,00,000  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 3 IT(T.P)A No.574/Bang/2016 C.O. No.36/Bang/2018 monetary limit. No appeal shall be filed in respect of an assessment year or years in which the tax effect is less than the monetary limit.  Further, even in the case of composite order of any High Court or appellate 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.  In case where a composite order/ judgement involves more than one assessee, each assessee shall be dealt with separately.”

Accordingly, the appeal filed by the Department is not maintainable being below the monetary limit prescribed by the CBDT. The Department is at liberty to file the Misc. Application in case the tax effect in this appeal is found to be more than Rs.50 lakhs or the case falls in any of the exceptions of the aforesaid circular.

In the result, the appeal by the Department is dismissed and the C.O. filed by the assessee supporting the order of the ACIT become infructuous, hence also dismissed. Order pronounced in the open Court on 13th Sept., 2019.

ASST.C.I.T., BANGALORE vs. M/S INTERWOVEN SOFTWARE SERVICES PVT. LTD., BANGALORE

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