INCOME TAX OFFICER WARD-1(5), DAVANGERE vs. M/S RENUKAMBA CREDIT CO-OP SOCIETY LTD , DAVANGERE

This is an appeal filed by Revenue directed against the order Commissioner of Income-tax (Appeals), Davangere dated 26/3/2015 for the assessment years 2012-13.

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 less than Rs.10 lakhs for the impugned assessment year i.e it was Rs.1,46,840/- and by virtue of Circular No.21/2015 dated 10.12.2015 is below the limits laid down for filing appeals before this Tribunal. The ld DR has not disputed the fact that the tax effect in this appeal is below Rs.10 lakhs.

We have perused the orders and heard the contentions. Paras 3, 4 & 10 of the Circular No.21/2015 (Supra) is reproduced 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, ax 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 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 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 issue that is disputed by the Revenue is less than Rs.10 lakhs for the impugned assessment year i.e Rs.1,46,840/-. Neither, the provisions of the Act or Rules nor the legality or vires of any Board order, Notification, Instruction or Circular was an issue before the lower authorities. Addition giving rise to the appeals does not relate to any undisclosed foreign assets/bank accounts. Thus we find that the Circular No.21/2015 (Supra) is squarely applicable in this case.

In the result, Revenue’s appeals for asst. years 2012-13 is dismissed as not maintainable.