ACIT, CIRCLE - 34, KOLKATA vs. M/S. ASSAM TEA WAREHOUSING CORPORATION, KOLKATA

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ITA 2096/KOL/2018Status: DisposedITAT Kolkata17 January 2020AY 2014-153 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the Revenue's appeal should be dismissed due to the low tax effect, which was below the revised threshold limit prescribed by CBDT Circular No. 17/2019. The circular's revised monetary limits were found to be applicable retrospectively.

What were the facts?

The Revenue filed an appeal before the ITAT against an order of the CIT(A) for assessment year 2014-15. The disputed additions before the tribunal had a tax effect of ₹44,24,395.02.

What were the issues?

Whether the Revenue's appeal is maintainable when the tax effect of the disputed additions is below the revised monetary threshold prescribed by CBDT circulars. Applicability of CBDT Circular No. 17/2019 to pending appeals.

Which sections of the Income-tax Act were involved?

Section 143(3)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, KOLKATA BENCH “A” KOLKATA

Before: Shri S.S.Godara & Dr. A.L. Saini

आदेश /O R D E R PER S.S.Godara, Judicial Member:- This Revenue’s appeal for assessment year 2014-15, arises against the Commissioner of Income-tax (Appeals)-10 Kolkata’s order dated 27.07.2018 passed in case No.136/CIT(A)-10/Cir-34/14-15/2016-17, involving proceedings u/s 143(3) of the Income Tax Act, 1961; in short ‘the Act’. Heard both the sides. Case file perused.

2.

It is seen at the outset that the tax effect on the disputed additions before us is less than Rs. 50 lacs in cases i.e. less than the prescribed revised threshold limit in CBDT’s latest Circular No17/2019 dated ACIT, Cir-34, Kol. vs. M/s Assam Tea Warehousing Corporation Page 2 08.08.2019. It will be pertinent to reproduce the relevant portion of the said Circular as follows:- “2 . As a step toward further management of litigation, it has been decided by the Board that monetary limits for filing of appeals in income-tax cases be enhanced further through amendment in Para 3 of the Circular mentioned above and accordingly, the table for monetary limits specified in Para 3 of the Circular shall read as follows: S.No. Appeals/SLPs in Income-tax matters Monetary Limit (Rs.) 1. Before Appellate Tribunal 50,00,000 2. Before High Court 1,00,00,000 3. Before Supreme Court 2,00,00,000 3.1 We find that intention behind the Circular No17/2019 dated 08.08.2019 needs to be understood in the following perspective:- 3. Further, with a view to provide parity in filing of appeals in scenarios where separate order is passed by higher appellate authorities for each assessment year vis-à-vis where composite order for more than one assessment year is passed, para 5 of the circular is substituted by the following para: “5. 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, 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 monetary limit specified in para 3. No. appeal shall be filed in respect of an assessment year or years in which the tax effect is less than the monetary limit specified in para 3. 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 assessments 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 specified in para 3. In case where a composite order/judgment involves more than one assessee, each assessee shall be dealt with separately.” 3.2. On perusal of the Circular No. 17/2019 dated 08.08.2019 and the materials available on record, we do not see this case falling under any of the exceptions contemplated in the said circular per se. We also find that this circular makes it very clear that the revised monetary limits shall apply retrospectively to pending appeals as well. Hon’ble apex court in Commissioner of Customs vs Indian Oil Corporation Ltd reported in 267 ITR 272 (SC) has settled the law that CBDT’s circulars are very much binding on ACIT, Cir-34, Kol. vs. M/s Assam Tea Warehousing Corporation Page 3 revenue authorities. We thus hold that this Revenue’s appeal raising sole issue of ₹44,24,395.02 deserve to be dismissed in terms of low tax effect. We make it clear that it shall very much open for the Revenue to seek necessary rectification in case it is found that any of the appeal involve operations of exception clauses in the tax effect circular as per law.

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