What did the Tribunal hold?

The Tribunal agreed with the Revenue's submission and dismissed the appeals as withdrawn. The Revenue was granted liberty to file Miscellaneous Applications for cases that were inadvertently included or met exceptions to the circular.

The Income Tax Appellate Tribunal (ITAT) was considering multiple appeals where the tax effect was below the monetary limit of Rs. 20,00,000/- as per CBDT Circular No. 3/2018. The Revenue sought liberty to withdraw these appeals.

What were the issues?

Whether appeals with a tax effect below the specified monetary limit should be dismissed, and whether exceptions to this limit should be considered.

DCIT vs Shri Devang K. Gandhi | ITAT Mumbai 2018

Shri Ramesh G. Gowani & Ors 25 & Ors ORDER PER BENCH The Central Board of Direct Taxes (CBDT) vide Circular No. 3/2018 dated 11.07.2018 has specified that appeals shall not be filed before the Income Tax Appellate Tribunal (ITAT) in cases where the tax effect does not exceed the monetary limit of Rs.20,00,000/-. For this purchase, ‘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 issues against which appeal is intended to be filed. Further, ‘tax effect’ shall be taxes 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 order, the tax effect will mean quantum of penalty deleted or reduced in the order to be appealed against.

In the captioned appeals, it seems the tax effect does not exceed the monetary limit of Rs.20,00,000/-. At para 13 of the above Circular, it has been mentioned that: “13. This Circular will apply to SLPs/appeals/cross objection/references to be filed henceforth in SC/HCs/Tribunal and it shall also apply retrospectively to pending SLPs/appeals/cross objections/references. Pending appeals Shri Ramesh G. Gowani & Ors 26 ITA No. 4680/Mum/2017 & Ors below the specified tax limits in para 3 above may be withdrawn/not pressed.”

Before us, the Ld. DR submits that liberty may kindly be given to raise, after necessary further verification, and to seek recall the dismissal of appeals and restoration of the appeals in the cases (i) in which it can be shown that the appeals are covered by the exceptions and (ii) which are inadvertently included in this bunch of appeal, wherein the tax effect in terms of the above CBDT Circular, exceed Rs.20,00,000/-. There was no opposition from the Ld. counsels of the assessee to the above submission of the Ld. DR.

We agree with the above contentions of the Ld. DR and make it clear that the appellants shall be at liberty to file Miscellaneous Applications to point out the cases which are wrongly included in these appeals so summarily dismissed, and we will take appropriate remedial measures in this regard.

In view of the above observations, these appeals, involving tax effect of less than Rs.20,00,000/- are dismissed as withdrawn. Order pronounced in the open court on 24/08/2018. Sd/- Sd/- ( C.N. PRASAD) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 24/08/2018 Rahul Sharma, Sr. P.S.

DCIT CENT.CIR.8(2), MUMBAI vs. SHRI DEVANG K. GANDHI, MUMBAI

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