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Facts
The revenue filed an appeal against an order passed by the NFAC, which originated from an assessment order under section 143(3) for AY 2018-19. The tax effect in this appeal was Rs.16,44,667/-.
Held
The Tribunal referred to CBDT Circular No. 3/2018 and Circular No. 17/2019, which stipulated that appeals shall not be filed before the ITAT if the tax effect does not exceed Rs. 50,00,000/-. Since the tax effect in this appeal was below the monetary limit, it was considered for dismissal.
Key Issues
Whether the appeal filed by the revenue is admissible given the tax effect is below the prescribed monetary limit as per CBDT circulars.
Sections Cited
143(3)
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Income Tax Appellate Tribunal, “C” BENCH, MUMBAI
आदेश / O R D E R PER AMARJIT SINGH, AM:
The present appeal filed by the revenue is directed against the order passed by the NFAC, which in turn arises from the assessment order 2018-19 u/s 143(3) of the Act.
After taking into consideration the tax effect of Rs.16,44,667/- involved in this case it is noticed that Central Board of Direct Taxes (CBDT) vide Circular No. 17/2019 dated 08.08.2019 has amended Circular No. 3/2018 dated 11.07.2018 for further enhancement of monetary limit for filing of appeals by the Department before the ITAT,
P a g e | DCIT (Central)1-(1) Vs. Prakash Gandalal Patel High Courts and SLPs/Appeals before Supreme Court as measures for reducing litigation.
CBDT vide Circular No. 3/2018 dated 11.07.2018 has specified that appeals shall not be filed before the Income Tax Appellate Tribunal (ITAT) in cases where the tax effect does not exceed the monetary limit of Rs.50,00,000/-. 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 issues against which appeal is intended to be filed. Further, ‘tax effect’ shall be taxes 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 order, the tax effect will mean quantum of penalty deleted or reduced in the order to be appealed against.
At para 13 of the above Circular, it has been mentioned that:
“13. This Circular will apply to SLPs/appeals/cross objection/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.”
As a step towards further management of litigation, CBDT vide Circular No. 17/2019 has fixed the monetary limit for filing of appeals before ITAT at Rs.50,00,000/-.
In the instant appeal filed by the Department, the tax effect involved is below the monetary limit of Rs.50,00,000/-.
P a g e | DCIT (Central)1-(1) Vs. Prakash Gandalal Patel 6. The revenue shall be at liberty to point out the exceptions and to seek recall the dismissal of appeal and restoration of the appeal in case it can be shown that the appeal is covered by the exceptions.
With the above observations, the appeal of the Revenue involving tax effect Rs.16,44,667/- which is less than Rs.50,00,000/- stand dismissed. Order pronounced in the open Court on 21.06.2024