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Facts
The Revenue filed an appeal against the CIT(A)'s order concerning an assessment under section 143(3) for A.Y. 2021-22. The Tribunal raised a query regarding the appeal's maintainability based on CBDT Circular No. 17/2019, which restricts appeals where the tax effect is below Rs. 50 lakhs.
Held
The Tribunal noted that the tax effect in the Revenue's appeal was less than Rs. 50 lakhs and did not fall under the exceptions of CBDT Circular No. 17/2019. Consequently, in light of the circular and Section 268A of the Income Tax Act, the appeal was dismissed as not maintainable, with a liberty for recall if re-verification shows a higher tax effect or an exception applies.
Key Issues
Maintainability of the Revenue's appeal before the ITAT when the tax effect is below the monetary limit prescribed by CBDT Circular No. 17/2019.
Sections Cited
143(3), 268A
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Income Tax Appellate Tribunal, SURAT BENCH, SURAT
Before: Shri Sanjay Garg & Shri Bijayananda Pruseth
Assessee by: Shri Hardik Vora, A.R. Revenue by: Shri Aashish Pophare, CIT-D.R. Date of hearing : 05-03-2025 Date of pronouncement : 28-03-2025 आदेश/ORDER
Per Sanjay Garg, Judicial Member:
The present appeal has been filed by the Revenue against the order passed by the Learned Commissioner of Income Tax (Appeal)-4, Surat [hereinafter referred to as “CIT(A)’] dated 28.06.2024 arising out of the assessment order passed u/s.143(3) of the Income Tax Act, 1961 (here-in- after referred to as “the Act”) relevant to the Assessment Year 2021-22.
At the outset, after going through the grounds of appeal and the impugned orders of the Revenue authorities below, a query was raised by the Bench as to applicability and maintainability of the appeal filed by the Revenue in view of recent CBDT Circular No. 17/2019 dated 8.8.2019 restricting the filling of the appeal by the Revenue where the tax effect is below Rs.50 lakhs, the ld. DR did not dispute the same and submitted that the issue is left to the Tribunal to be decided in accordance with law.
3. We find that the appeal of the Revenue is presented on 07.8.2024. On 8.8.2019 the CBDT has issued Instructions bearing No. 17 of 2019 prohibiting its subordinate authorities from filing of the appeal to the Tribunal against the order of the CIT(A) where the tax effect by virtue of the relief given by the CIT(A) is less than Rs.50 lakhs. The instructions have been made applicable with retrospective effect, meaning thereby, these instructions are applicable on pending appeals also. In the present case, “tax effect” on the total income assessed minus the tax that would have been chargeable had such total income been reduced by the amount of income in respect of the issue against which appeal is filed, is less than Rs.50 lakhs. Further, the case of the Revenue does not fall within the ambit of exceptions provided in the Circular. Thus, keeping in view the above CBDT circular and provisions of section 268A of the Income Tax Act, we are of the view that the present appeal of the Revenue deserves to be dismissed. It is accordingly dismissed.
However, it is observed that in case on re-verification at the end of the AO it comes to the notice that the tax effect is more or Revenue’s case falls within the ambit of exceptions provided in the Circular, then the Department will be at liberty to approach the Tribunal for recall of this order. Such application should be filed within the time period prescribed in the Act. In view of the above, the appeal of the Revenue is dismissed due to low tax effect.