What did the Tribunal hold?

The Tribunal noted that the tax effect in these appeals was below the revised monetary limit of Rs. 50,00,000/- set by the CBDT for filing appeals before the ITAT. Consequently, the appeals were dismissed as withdrawn.

The Revenue filed appeals before the ITAT against the orders of the CIT(A) for assessment years 2013-14 and 2014-15. The appeals involved common issues and were consolidated for disposal.

What were the issues?

The primary issue was whether the appeals filed by the Revenue should be entertained given the tax effect was below the prescribed monetary limit for filing appeals before the ITAT as per CBDT circulars.

DCIT vs Bsr & Associates LLP | ITAT Mumbai 2019

Income Tax Appellate Tribunal, MUMBAI BENCH “I” MUMBAI

Before: SHRI RAVISH SOOD & SHRI N.K. PRADHAN

For Appellant: Mr. Arijit Chakaravarty &, Mr. Abhishek Tilak, ARs

For Respondent: Mr. Nishant Samaiya, DR, Mr. Arijit Chakaravarty &, Mr. Abhishek Tilak, ARs

Hearing: 29/08/2019Pronounced: 29/08/2019

ORDER PER Bench The captioned appeals filed by the Revenue are directed against the order of the Commissioner of Income Tax (Appeals)-5, Mumbai [in short CIT(A)] and arise out of the assessment completed u/s 143 of the Income Tax Act 1961 (the ‘Act’). As common issues are involved, we are proceeding to dispose them off through a consolidated order for the sake of convenience.

3 M/s BSR & Associates 1235, 3253, 3255, 3256/Mum/2018

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 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 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 4 M/s BSR & Associates 1235, 3253, 3255, 3256/Mum/2018 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/-.

Before us, the Ld. Departmental Representative (DR) and the Ld. counsels for the assessee submit that the tax effect in the aforementioned appeals is below the monetary limit of Rs.50,00,000/-.

In the result, the above appeals involving tax effect of less than Rs.50,00,000/- are dismissed as withdrawn.

DCIT - 16(2), MUMBAI vs. BSR & ASSOCIATES LLP, MUMBAI

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