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Income Tax Appellate Tribunal, BANGALORE BENCH ‘ A ’
Before: SHRI N.V. VASUDEVAN & SHRI JASON P BOAZ
O R D E R Per Shri Jason P Boaz, A.M. : This is an appeal filed by Revenue, directed against order of the Commissioner of Income Tax (Appeals), Davangere dt.20.9.2017 for Assessment Year 2011-12.
When the appeal was taken up for hearing Ld. Counsel for the Assessee pointed out to the Ld. DR that tax effect involved in this appeal was less than Rs.10 lakhs for the impugned assessment year as the addition deleted by the CIT
2 (Appeals) which is the subject matter of appeal is only Rs.22 lakhs and therefore by virtue of CBDT Circular No.21/2015, dt.10.12.2015, are below the limits laid down for filing appeals before this Tribunal.
Ld. DR has not disputed the tax effect being below Rs.10 lakhs in the issue involved in the revenue’s appeal.
We have perused the impugned order and heard the contentions. The relevant paras 3, 4 & 10 of the CBDT Circular No.21/2015 (supra) are extracted hereunder :
“3. Henceforth, appeals/SLPs shall not be filed in cases where the tax effect does not exceed the monetary limits given hereunder:— S.No. Appeals in Income-tax matters Monetary Limit (in Rs.) 1. Before Appellate Tribunal 10,00,000/- 2. Before High Court 20,00,000/- 3. Before Supreme Court 25,00,000/- 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”). 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 3 additions. In case of penalty orders, the tax effect will mean quantum of penalty deleted or reduced in the order to be appealed against.
This instruction will apply retrospectively to pending appeals and appeals to be filed henceforth in High Courts/Tribunals. Pending appeals below the specified tax limits in para 3 above may be withdrawn/ not pressed. Appeals before the Supreme Court will be governed by the instructions on this subject, operative at the time when such appeal was filed.”
The tax effect on the issues that is disputed by the Revenue is less than Rs.10 lakhs for the impugned assessment year 2011-12. Constitutional validity of any provisions of the Act or Rules or the legality or vires of any Board order, Notification, Instruction or Circular was not an issue before the lower authorities. The addition giving rise to the appeals does not relate to any undisclosed foreign assets / bank accounts. Thus we find that CBDT’s Circular No.21/ 2015 (supra) is squarely applicable in this case. In view of the tax effect of the issue in appeal, i.e. addition of Rs.22 lakhs, is less than Rs.10 lakhs and in view of CBDT Circular No.21/2015 dt.10.12.2015, Revenue’s appeal is not maintainable and is dismissed in limine. 06. In the result, the appeal of the Revenue is dismissed as not maintainable. Order pronounced in the open court on 10th April, 2018. Sd/- Sd/- (N.V. VASUDEVN) (JASON P BOAZ) Judicial Member Accountant Member *Reddy gp