What did the Tribunal hold?

The Tribunal held that Circular No. 21/2015, which sets a monetary limit for filing appeals, was applicable. As the tax effect was below the prescribed limit, the appeal was not maintainable.

The Revenue filed an appeal against an order of the CIT(A) for AY 2012-13. The tax effect involved in the appeal was less than Rs. 10 lakhs.

What were the issues?

Whether the Revenue's appeal is maintainable before the Tribunal given the tax effect is below the prescribed monetary limit as per the CBDT circular.

ACIT vs Smt. Yashoda | ITAT Bangalore 2016

Income Tax Appellate Tribunal, SMC, BENGALURU BENCH C, BENGALURU

Before: SHRI GEORGE GEORGE K

For Appellant: Shri. Ravi Shankar, Advocate

IN THE INCOME TAX APPELLATE TRIBUNAL SMC, BENGALURU BENCH 'C', BENGALURU BEFORE SHRI GEORGE GEORGE K, JUDICIAL MEMBER (Assessment Year : 2008-09) Asst. Commissioner of Income tax, Circle -5(2)(2), Bengaluru .. Appellant v. Smt. Yashoda, No.61, N. R. Road, Bengaluru 560 002 .. Respondent Assessee by : Shri. Ravi Shankar, Advocate Revenue by : Smt. S. Praveena, Addl. CIT Heard on : 01.12.2016 Pronounced on : 01.12.2016 O R D E R PER GEORGE GEORGE K, JUDICIAL MEMBER :

This is an appeal filed by the Revenue, against order dated 30.06.2016 of CIT (A) -5, Bangalore, for the A. Y. 2012-13.

When the appeal was taken up for hearing, it was pointed out to the Bench that tax effect involved in this appeal was less than Rs.10 lakhs for the impugned assessment year, therefore by virtue of Circular ITA.1716/Bang/2016 Page - 2 No.21/2015, dt.10.12.2015, is below the limit laid down for filing appeals before this Tribunal.

Ld. DR submitted that para 8 of the circular was not applicable in this case. Therefore he did not object to the application of the circular.

We have perused the orders and heard the contentions. Para 4 of the circular No.21/2015 (supra) is reproduced hereunder :

“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”). 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 tax effect on the issues that are disputed by the Revenue is less than Rs.10 lakhs for the impugned assessment year. Assessee had not challenged the constitutional validity of any provisions of the Act nor had it challenged the legality of the Circular. Revenue has not brought to our notice anything to show that the appeal arose on an issue emanating from any Revenue Audit Objections accepted by the Department. Addition ITA.1716/Bang/2016 Page - 3 giving rise to the appeal does not relate to any undisclosed foreign assets / bank accounts. Thus we find that circular No.21/ 2015 (supra) is squarely applicable in this case. However if Revenue find that appeal arise out of issues emanating from audit objection it will be free to file MP for recalling this order. If the appeal gets revived then needless to say the CO shall also be revived.

With the above observations appeal of the Revenue is dismissed.

Pronounced in the open court on this 1st day of December, 2016.

ACIT-CIRCLE-5(2)(2), BANGALORE vs. SMT. YASHODA, BANGALORE

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