INCOME TAX OFFICER 41(2)(5), MUMBAI, BANDRA KURLA COMPLEX vs. SAPTASHRUNGI CO-OPERATIVE CREDIT SOCIETY LIMITED, MUMBAI

ITA 4544/MUM/2023Status: DisposedITAT Mumbai29 August 2024AY 2014-153 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal observed that the tax effect on the disputed additions before it was less than Rs.50 lacs, as prescribed in CBDT's Circular No.17/2019 dated 08.08.2019. The circular clearly states that the monetary limit for filing appeals before the Appellate Tribunal is Rs.50,00,000. Based on this circular, the Tribunal found that the appeal filed by the Revenue did not meet the threshold for litigation management. Therefore, the Tribunal decided that the appeal was not maintainable. The ratio decidendi is that appeals filed by the Revenue before the ITAT, where the tax effect is below the monetary limit stipulated by the CBDT circular, are liable to be dismissed on the grounds of low tax effect and for effective litigation management.

What were the facts?

The Revenue has filed an appeal before the Income Tax Appellate Tribunal (ITAT), Mumbai Bench 'G', against an order dated 06.12.2023 passed by the Pr. Commissioner of Income Tax-41, Mumbai. The appeal pertains to Assessment Year 2014-15. The assessee is Saptashrungi Co-operative Credit Society Limited. The ITAT noted that the tax effect on the disputed additions was less than Rs.50 lacs, which is the prescribed monetary limit for filing appeals before the Tribunal as per CBDT's Circular No.17/2019 dated 08.08.2019. The operative part of the circular regarding the monetary limit for appeals before the Appellate Tribunal was reproduced.

What were the issues?

1. Whether the appeal filed by the Revenue is maintainable before the Tribunal given that the tax effect on the disputed additions is below the prescribed monetary limit of Rs.50 lacs as per CBDT Circular No.17/2019. Assessee's Contention: The assessee did not explicitly present arguments in the provided text, but the Tribunal's observation regarding the tax effect implies the assessee would likely rely on the CBDT circular to argue for the dismissal of the appeal on grounds of low tax effect. Revenue's Contention: The provided text does not explicitly state the Revenue's arguments. However, the Revenue has filed the appeal, indicating they believe it should be heard on merits despite the tax effect.

Which sections of the Income-tax Act were involved?

None explicitly mentioned in the provided text, other than reference to CBDT Circular No.17/2019.

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH ‘G’, MUMBAI

Before: SHRI AMARJIT SINGH, HONBLE & SHRI ANIKESH BANERJEE, HONBLE

For Appellant: Ms. Darshana Chordia

For Respondent: Dr. Kishor Dhule, CIT/DR

Hearing: 31.07.2024Pronounced: 29.08.2024

The present appeal filed by the Revenue is directed against the order dated 06.12.2023 of the Pr. Commissioner of Income Tax-41, Mumbai for Assessment Year 2014-15.

2 It is seen, at the outset, that the tax effect on the disputed additions before us is less than Rs.50 lacs as the prescribed in the CBDT’s latest Circular No.17/2019 dated 08.08.2019. It will be pertinent to reproduce the relevant portion of the said Circular as follows:-

“2 . As a step toward further management of litigation, it has been decided by the Board that monetary limits for filing of appeals in income-tax cases be enhanced further through amendment in Para 3 of the Circular mentioned above and accordingly, the table for monetary limits specified in Para 3 of the Circular shall read as follows:

S.No. Appeals/SLPs in Income-tax Monetary Limit matters (Rs.) 1. Before Appellate Tribunal 50,00,000 2.1 We find that intention behind the Circular No.17/2019 dated 08.08.2019 needs to be understood in the following perspective:- 3. Further, with a view to provide parity in filing of appeals in scenarios where separate order is passed by higher appellate authorities for each assessment year vis-à-vis where composite order for more than one assessment year is passed, para 5 of the circular is substituted by the following para: “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, 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. Further, even in the case of composite order of any High Court or appellate authority which involves more than one assessment year and common issues in more than one assessments year, 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 case where a composite order/judgment involves more than one assessee, each assessee shall be dealt with separately.”

2.2. On perusal of the Circular No.17/2019 dated 08.08.2019 and the materials available on record, it reveals 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.

The ld. DR has also fairly stated that tax effect involved in appeal is less than the prescribed limit.

Saptashrungi Co-operative Credit Society Limited A.Y. 2014-15 4. In view of above stated position, the appeal of the Revenue is dismissed because of low tax effect than the prescribed limits as per CBDT Circular No.17/2019 (supra). Order pronounced in the open court on 29.08.2024

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