DCIT, CIR-1(2), KOLKATA, KOLKATA vs. M/S THE INDIAN STEEL WIRE PRODUCTS LTD., KOLKATA

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ITA 1567/KOL/2016Status: DisposedITAT Kolkata03 May 2019AY 2008-093 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 as the tax effect was below the prescribed monetary limit. The circular applies retrospectively to pending appeals.

What were the facts?

The Revenue filed an appeal against the CIT(A)'s order for assessment year 2008-09. The tax effect on the disputed additions was less than Rs. 20 lacs, which is below the revised threshold limit set by CBDT Circular No. 3/2018.

What were the issues?

Whether the Revenue's appeal should be dismissed due to low tax effect as per CBDT Circular No. 3/2018, which sets revised monetary limits for filing appeals.

Which sections of the Income-tax Act were involved?

Section 143(3)

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, KOLKATA BENCH “C” KOLKATA

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

O R D E R

PER S.S.Godara, Judicial Member:

1.

- This Revenue’s appeal for assessment year 2008-09, arises against the Commissioner of Income-tax (Appeals)-1, Kolkata’s order dated 05.05.2016 passed in case No.271/CIT(A)-1/Cir-3/2010-11, 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. 20 lacs in cases i.e. less than the prescribed revised threshold limit in CBDT’s latest Circular No. 3/2018 dated 11.07.2018. It will be pertinent to reproduce the relevant portion of the said Circular No. 3/2018 dated 11.07.2018:- “3 . Henceforth, appeals/ SLPs shall not be filed in cases where the tax effect does not exceed the monetary limits given hereunder: Sl.

DCIT, Cir-1(2), Kol. Vs. M/s The Indian Steel Wire Products Ltd. Page 2 No. Appeals/SLP’s in Income-tax matters Monetary Limit (in Rs) 1. Before Appellate Tribunal 20,00,000/- 2. Before High Court 50,00,000/- 3. Before Supreme Court 1,00,00,000/- It is clarified that an appeal should not be filed merely because the tax effect in a case exceeds the monetary limits prescribed above. Filing of appeal in such cases is to be decided on merits of the case.

4.

For this purpose, '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 the issues against which appeal is intended to be filed (hereinafter referred to as 'disputed issues’). Further, 'tax effect' shall be tax 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 orders, the tax effect will mean quantum of penalty deleted or reduced in the order to be appealed against.”

3.1 We find that intention behind the Circular No3/2018 dated 11.07.2018 needs to be understood in the following perspective:- By passage of time, the money value has gone down, the cost of litigation expenses has gone up, number of assesses on the files of the department have been increased and consequently, the burden on the department is also increased to a tremendous extent. The Corridors of the Superior Courts are choked with huge pendency of cases. In this view of the matter, the CBDT has rightly taken a decision to revise the monetary limits in tune with the present value of money and with a view to reduce the litigation and offering relief to small tax payers. This is also in view of the fact that time and energy of the department could be used more productively and efficiently to catch hold of big fishes, who in turn would contribute more to the development of the country.

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