DCIT, CIRCLE-12(1), KOLKATA, KOLKATA vs. M/S DALMIA SECURITIES PVT. LTD., KOLKATA

At the outset, the ld.AR of the assessee has filed a statement regarding details of disallowance made by the AO and confirmed by the CIT-A and submitted that the tax thereon is below the monetary limit as prescribed and the relevant details are hereunder:- Kol 2017 Particulars Amount Relevant Page No. Amount Disallowed by AO(A) 31,04,487 Page 5 of the Assessment Order Amount confirmed by CIT(A)(B) 4,04,749/- Page 11 (Para 5.2) of the CIT(A) order Amount involved in ITAT Appeal 26,99,738 (A-B) Tax Effect 8,09,921 Surcharge 80,992 Education Cess 26,727 Total Tax Effect 9,17,641 The Tax Effect is below 10,00,000

The ld.DR did not controvert the same.

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’). 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.

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.

Adverse judgements relating to the following issues should be contested on merits notwithstanding that the tax effect entailed is less than the monetary limits specified in para 3 above or there is no tax effect:

This instruction will apply retrospectively to pending appeals and 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 -T.E be governed by the instructions on this subject, operative at the time when such appeal was filed.