What did the Tribunal hold?

The Tribunal held that the directions in para 5 of the CBDT Circular do not apply as the tax effect in both appeals was below the prescribed monetary limit. Therefore, the appeals were not maintainable.

The Revenue filed appeals against a consolidated order of the CIT(A) for assessment years 1995-96 and 1996-97. The tax effect in both appeals was below the monetary limit prescribed by CBDT Circular No. 21/2015.

What were the issues?

Whether the Revenue's appeals are maintainable before the ITAT when the tax effect in each appeal is below the prescribed monetary limit, despite being part of a composite order.

ACIT vs Dr. J.P. Paliwal, Bhopal | ITAT Indore 2017

Income Tax Appellate Tribunal, INDORE BENCH, INDORE

Before: SHRI C.M. GARG & SHRI O.P. MEENA

For Respondent: Shri Mohd. Javed - DR

आदेश /O R D E R

PER BENCH

These appeals have been filed by the Revenue against

consolidated order of the learned CIT(A)-II, Bhopal, dated 30.6.2016

in First Appeal Nos. CIT(A)-2/Bhopal-307/2009-10 and CIT(A)-

ACIT vs. Dr. JP Paliwal ITA Nos. 939 & 940/Ind/2016 2/Bhopal-308/2009-10 for the assessment years 1995-96 and

1996-97, respectively.

When the case was called for hearing, neither the respondent

assessee nor his representative appeared nor there is any

application for adjournment. However, on perusal of appeal

record, we find it appropriate to decide the appeals after hearing the

learned DR and thus we proceed accordingly.

At the very outset, the learned DR drew our attention towards

para 5 of Board Circular No. 21/2015 dated 10.12.2015 and

submitted that the order of the learned CIT(A)-II, Bhopal, dated

18.3.2010 has been passed disposing of two appeals of the assessee

and hence the same is a consolidated order for the assessment

years 1995-96 and 1996-97. The learned DR, therefore, submitted

that in view of para 5 of the Board Circular (supra), these appeals

cannot be dismissed on account of monetary limit enhanced by the

Circular dated 10.12.2015 (supra).

On careful consideration of the above submissions, for the

sake of completeness and clarify in our findings, para 5 of the

Board Circular dated 10.12.2015 (supra) is reproduced hereunder :-

ACIT vs. Dr. JP Paliwal ITA Nos. 939 & 940/Ind/2016 “5. The Assessing Officer shall calculate the tax effect separately for every assessment year in respect of the disputed issues in the case of every assessee. 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. In other words, henceforth, appeals can be filed only with reference to the tax effect in the relevant assessment year. However, in case of a 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, appeal shall be filed in respect of all such assessment years even if the ‘tax effect’ is less than the prescribed monetary limits in any of the year(s), if it is decided to file appeal in respect of the year(s) in which ‘tax effect’ exceeds the monetary limit prescribed. In case where a composite order/ judgement involves more than one assessee, each assessee shall be dealt with separately.” 6. On careful consideration of the above, in our humble

understanding, the intention of the Board Circular as per second

limb of para 5 is that in a case of composite order of any Hon'ble

High Court or appellate authority including the learned CIT(A),

which involves more than one assessment year and common issues

in more than one assessment year, then the appeal(s) shall be filed

in respect of all such assessment years if it is decided by the

Revenue to file appeal before the Tribunal in respect of the year in

ACIT vs. Dr. JP Paliwal ITA Nos. 939 & 940/Ind/2016 which tax effect exceeds the monetary limit prescribed, even if the

tax effect is less than the prescribed monetary limit in any of the

other year(s). In our considered opinion, the directions contained in

para 5 of the Circular provide that in a case of composite order by

any appellate authority including the learned CIT(A), which involves

more than one assessment year and if the revenue decides to file

appeal in respect of the year(s) in which the tax effect exceeds the

prescribed monetary limit then the appeals shall be filed in respect

of all such assessment years even if the tax effect is less than the

prescribed monetary limit in any of the other year(s), which is also

arising from such composite order.

In view of the above, for application of directions contained in

para 5 of the Circular (supra), it is necessary that the tax effect

should exceed the monetary limit prescribed in atleast one appeal

and if the revenue decides to file the appeal for that year wherein

the tax effect exceeds the monetary limit prescribed then the

appeals shall be filed in respect of all such assessment years

despite the fact that tax effect is less than the prescribed monetary

limit in any of the other year(s). In the present case, admittedly and

undisputedly the learned CIT(A)-II, Bhopal has passed a composite 4

ACIT vs. Dr. JP Paliwal ITA Nos. 939 & 940/Ind/2016 order for the assessment years 1995-96 and 1996-97 and the

revenue by filing these appeals has agitated the issue of deletion of

addition on account of unexplained investment in construction of

hotel building of Rs.29,01,680/- and Rs.28,50,550/- for the

assessment years 1995-96 and 1996-97, respectively and the

learned DR could not controvert his fact that the tax effect in both

the appeals is less than the prescribed monetary limit provided by

the Board Circular dated 10.12.2015 (supra). Thus, we are inclined

to hold that the tax effect in both the appeals is less than the

prescribed monetary limit and there is no appeal wherein the tax

effect exceeds the monetary limit prescribed by the Board Circular

(supra) which is arising from the impugned composite order of the

learned CIT(A). Therefore, in our considered opinion, the directions

contained in para 5 of the Board Circular (supra) do not apply to

the present appeals and, therefore, we decline to accept the

contention of the learned DR placed on the strength of para 5 of the

Board Circular, as reproduced hereinabove.

We have heard both the sides. We find that the CBDT vide

Circular no. 21/20145 issued on 10.12.2015 has revised the

monetary limit for filing of appeal before ITAT fixing the tax effect 5

ACIT vs. Dr. JP Paliwal ITA Nos. 939 & 940/Ind/2016 limit at Rs.10 lacs. We find that the tax effect involved in the

present appeals is below the monetary limit, therefore, we dismiss

these departmental appeals in limine being not maintainable.

In the result, both the appeals of the revenue are dismissed.

The order has been pronounced in open Court on 23rd March,

2017.

Sd/- sd/-

लेखा सद�य �या�यक सद�य (O.P.Meena) (C.M. Garg) Accountant Member Judicial Member

March 23rd, 2017.

Dn/

THE ACIT, 3(1), BHOPAL vs. DR. J.P. PALIWAL, BHOPAL

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