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Income Tax Appellate Tribunal, KOLKATA ‘A’ BENCH, KOLKATA
Before: Shri P.M. Jagtap & Shri S.S. Viswanethra Ravi
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.”
On perusal of the Circular No. 3/2018 dated 11.07.2018 and the materials available on record, we do not see these cases falling under any of the exceptions contemplated in the said circular per se. We also find that this circular makes it very clear that the revised monetary limits shall apply retrospectively to pending appeals as well. Hon’ble apex court in Commissioner of Customs vs Indian Oil Corporation Ltd reported in 267 ITR 272 (SC) has settled the law that CBDT’s circulars are very much binding on revenue authorities. We thus hold that all these Revenue’s appeals deserve to be dismissed in terms of low tax effect. We make it clear that it shall be very much open for the Revenue to seek necessary rectification in case it is found that any of these appeals involve operations of exception clauses in the tax effect circular as per law.
As a result of dismissal of Revenue’s appeals in terms of low tax effect, he corresponding two Cross Objections filed by the assessee have become infructuous and the same are accordingly dismissed.
In the result, all the appeals of the Revenue and two Cross Objections filed by the assessee are dismissed.
Order pronounced in the open Court on July 31, 2018. Sd/- Sd/- (S.S. Viswanethra Ravi) (P.M. Jagtap) Judicial Member Accountant Member Kolkata, the 31st day of July, 2018 Copies to : (1) Kumudini Thirani; (2) M/s. MRT Signals Limited; (3) M/s. Prakash Ply Exim Pvt. Limited, (4) M/s. Orissa Metaliks Pvt. Limited; (5) M/s. RTC Financial Services Pvt. Limited, (6) M/s. Anandaloke Medical Centre Pvt. Limited; (7) M/s. Zoom Enterprise Limited; (8) M/s. West Bengal Housing Infrastructure Dev. Corporation Ltd. (9) M/s. Magnum Clothing Pvt. Limited; (10) Md. Razzakuzzaman; (11) M/s. Renault Developers Pvt. Limited; (12) M/s. BMA Commodities Pvt. Limited; (13) M/s. Bengal Techno Industrial Projectrs Limited, (14) Shri Tapan Kumar Karmakar; (15) M/s. Dream Valley Vinimay Pvt. Limited; (16) Income Tax Officer, Ward-29(4)/6(1)/14(2), Kolkata; (17) Assistant Commissioner of Income Tax, Central Circle-1(2), Kolkata; (18) Assistant Commissioner of Income Tax, C.C-3(3), Kolkata, (19) Deputy Commissioner of Income Tax,CC-4(4)/2(2), Kolkata, (20)ACIT-26(1), Kolkata, (21) DCIT, Circle-12(1)/10(1)/8(2), Kolkata (22) ACIT, Circle-42, Kolkata, (23) JCIT(OSD), Circle-14(2), Kolkata (24) Commissioner of Income Tax (Appeals)-2, (25) Commissioner of Income Tax- , (26) The Departmental Representative (27) Guard File