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Income Tax Appellate Tribunal, “A” BENCH : KOLKATA
Before: Hon’ble Shri P.M. Jagtap, AM & Shri S.S.Viswanethra Ravi, JM ]
PER BENCH On perusal of record, it is noticed that the tax effect involved in all these appeals of revenue is below Rs. 20,00,000/- and as per latest CBDT Circular No. 3/2018 dated 11.07.2018, the said appeals filed by the revenue are not maintainable.
Recently the CBDT has issued Circular No. 3/2018 dated 11.07.2018, whereby the monetary limits for filing of appeals by the Department before Income Tax Appellate Tribunal and High Courts and SLP before Supreme Court have been increased as measure for reducing Litigation. The revised monetary limits laid down in para-3 of this Circular and the manner of computing tax effect as laid down in para-4 of this Circular are as follows:
“3 . Henceforth, appeals/ SLPs shall not be filed in cases where the tax effect does not exceed the monetary limits given hereunder: Sl. No. Appeals/SLP’s in Income-tax matters Monetary Limit (in Rs) 1. Before Appellate Tribunal 20,00,000/- 2. Before High Court 50,00,000/- 3. Before Supreme Court 1,00,00,000/-
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.
5 Tax effect Below Rs.20 lakhs in the cases of M/s. Khalispur Cold Storage P.Ltd. Shyam Engg. Co.,Darjeeling Gardens P.Ltd & M/s. Autotech Services Ltd & Sushil Kr. Sharma, Azharul Haque, Debanjan Das Gupta,Debasish Das, Manas Kr. Adhya, Narayan Pd. Agarwala, Aditya Vikram Lakhotia & Ajit Pd. Dey
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.” 3. In para-13 of the said circular it has further been clarified that the revised monetary limits will apply retrospectively. The relevant para-13 of the Circular reads thus: “13. This Circular will apply to SLPs/appeals/cross objections/references to be filed henceforth in SC/HCs/Tribunal and it shall also apply retrospectively to pending SLPs/appeals/cross objections/references. Pending appeals below the specified tax limits in para 3 above may be withdrawn/not pressed.
It is a settled law that the Circulars issued by CBDT are binding on the Revenue. This position was confirmed by the Apex Court in the case of Commissioner of Customs vs Indian Oil Corporation Ltd. reported in 267 ITR 272 wherein their Lordships examined the earlier decisions of the Apex Court with regard to binding nature of the Circular and laid down that when a circular issued by the Board remains in operation then the Revenue is bound by it and cannot be allowed to plead that it is not valid or that it is contrary to the terms of the statute. The appeals under consideration have certainly been filed contrary to the Circular issued by the CBDT Circular No.3 dated 11.07.2018.
In the event, the Revenue finds at a later point of time that the tax effect in the appeal is more than Rs.20 lakhs or despite low tax effect the appeal of the 6 Tax effect Below Rs.20 lakhs in the cases of M/s. Khalispur Cold Storage P.Ltd. Shyam Engg. Co.,Darjeeling Gardens P.Ltd & M/s. Autotech Services Ltd & Sushil Kr. Sharma, Azharul Haque, Debanjan Das Gupta,Debasish Das, Manas Kr. Adhya, Narayan Pd. Agarwala, Aditya Vikram Lakhotia & Ajit Pd. Dey revenue is maintainable, the revenue is at liberty to move this Tribunal for recalling of this order.
In view of the above, we hold that the present appeals filed by the Department are contrary to the policy decision of the Department and as such the same are liable to be dismissed in limine. Consequently, the corresponding cross objection filed by the assesse in respect of one appeal of the Revenue has become infructuous and the same is also liable to be dismissed.
In the result, all the appeals by the Revenue and one cross objection of assesse are dismissed. Order pronounced in the Court on 30-07-2018