What did the Tribunal hold?

The Tribunal, following the CBDT circular and a Supreme Court decision, held that appeals with a tax effect below the specified monetary limit are not maintainable. The appeals were dismissed as withdrawn.

The Revenue filed 11 appeals before the ITAT, all concerning cases where the tax effect did not exceed Rs. 50,00,000/-. The appeals were filed after the issuance of a CBDT circular liberalizing the policy on filing appeals based on tax effect.

What were the issues?

The primary issue was whether appeals filed by the Revenue, with a tax effect below the monetary limit prescribed by CBDT circulars, were maintainable before the Tribunal.

ACIT vs Swapna Dutt Chalasani | ITAT Chennai 2019

Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI

Before: SHRI INTURI RAMA RAO & SHRI DUVVURU R.L.REDDY

For Respondent: Adv. 5-9, Adv. for Mr.R.Mugunthan, CA

आदेश / O R D E R PER BENCH:

These ‘11’ appeals are filed by the Revenue relating to different assessees, all these appeals call into question correctness of the relief granted to the taxpayers by the Commissioners of Income Tax (Appeals) and, most importantly, the tax effect involved in all these appeals does not exceed Rs.50,00,000/- in each of these appeals. are delayed by ‘02’ days, for which, the Revenue has filed Affidavit for condonation of the delay, to which, the ld.Counsel for the assessee has not raised any serious objection. Consequently, the delay of ‘02’ days in Tax effect (11) cases < Rs.50.00 Lakhs :- 3 -: filing of the appeals stand condoned and the appeals are disposed off on merits. is the appeal filed by the Revenue is delayed by ‘48’ days, for which, the Revenue has filed Affidavit for condonation of the delay. The ld.DR submitted that there was reasonable cause prevented the Department in filing the appeal with the delay of ‘48’ days and pleaded for condoning the delay. Since none appeared on behalf of the assessee and the Revenue was prevented by reasonable cause in filing belated appeal, the delay of ‘48’ days in filing of the appeal stands condoned and the appeal is disposed off on merits.

Vide CBDT circular No.17/2019 in F.No.279/Misc.142/2007-ITJ(Pt) dated 8th August, 2019, the income tax department has further liberalized its policy for not filing appeals against the decisions of the appellate authorities in favour of the taxpayers, wherein tax involved is below certain threshold limits, and announced its policy decision not to file, or press, the appeals, before this Tribunal, against the appellate orders favourable to the assessee in the cases in which overall tax effect, excluding interest except when interest itself is in dispute, is Rs.50,00,000/- or less.

4. In view of the above factual background and the concession by this CBDT circular, all these appeals must be dismissed as withdrawn.

Tax effect (11) cases < Rs.50.00 Lakhs :- 4 -:

This circular, only enhances the monetary limits and gives further relaxation. The old circular, beyond any dispute or controversy, categorically applied to the pending appeals as on the date of issuance of circular.

The circular dated 8th August 2019 is not a standalone circular. It is 6. to be read in conjunction with the CBDT circular No.3/2018 (and subsequent amendment thereto), and all it does is to replace paragraph nos.3 and 5 of the said Circular. This is evident from the following extracts from the circular dated 8th August 2019:

“2. As a step towards 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:

Appeals/SLPs in Income-tax Sl.No. Monetary limits (Rs.) matters 1 Before Appellate Tribunal 50,00,000 2 Before High Court 1,00,00,000 3 Before Supreme Court 2,00,00,000

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-a-vis where composite order for more than one assessment years 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 everyassessee. 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 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 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 specified in para 3. In case where a composite order/ judgement involves more than one assessee, each assessee shall be dealt with separately”

The said modifications shall come into effect from the date of issue of this Circular.”

Tax effect (11) cases < Rs.50.00 Lakhs :- 5 -:

Clearly, all other portions of the circular no.3 of 2018 (supra) have remained intact. The portion which has remained intact includes paragraph 13 of the aforesaid Circular which is as follows:

“13. This Circular will apply to SLPs/ appeals/ cross objections/ 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 pare 3 above may be withdrawn/ not pressed.” 8. The Hon’ble Supreme Court in the case of the Commissioner of Income Tax-5, New Delhi Vs. Keshav Power Ltd., in SLP No.21497/2019 dated 16.08.2019 reported in 2019 (8) TMI 811 (SC) has also applied the Circular No.17/2019 dated 08.08.2019 has dismissed the appeal holding as follows:

“Since the tax effect involved in the matter is less than Rs.2/- crores, going by the latest circular issued by the CBDT, we see no reason to interfere in this matter. The Special Leave Petition is dismissed, leaving all the questions of law open”. 9. The Learned Commissioner (DR) submits liberty may kindly be given to point out, upon necessary further verifications, and to seek recall the dismissal of appeals and restoration of the appeals in the cases (i) in which it can be demonstrated that the appeals are covered by the exceptions, and (ii) which are inadvertently included in this bunch of appeals, wherein the tax effect, in terms of the CBDT Circular (supra), exceeds Rs.50,00,000/-. None opposes this prayer; we accept the same.

We make it clear that the appellants shall be at liberty to point out the cases which are wrongly included in the appeals so summarily dismissed, either owing to wrong computation of tax effect or owning to such cases being covered by the permissible exceptions or for any other reason, and we will take appropriate remedial steps in this regard.

Tax effect (11) cases < Rs.50.00 Lakhs :- 6 -:

10.

In the circumstances, respectfully following the principles laid down by the Hon”ble Supreme Court in the case of Commissioner of Income Tax-5,New Delhi Vs. Keshav Power Ltd., referred to supra and in the light of the above discussions, all the appeals filed by the Revenue are found to be non-maintainable.

11.

In the result, all the appeals filed by the Revenue are dismissed.

Order pronounced on the 09th day of September, 2019 in Chennai.

ACIT NON CORPORATE CIRCLE 18(1), CHENNAI vs. SWAPNA DUTT CHALASANI, CHENNAI

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