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Income Tax Appellate Tribunal, “A” BENCH: KOLKATA
Before: Shri J.Sudhakar Reddy & Shri S.S. Viswanethra Ravi
ORDER Shri S.S.Viswanethra Ravi, JM:
These appeals by Revenue are arising out of separate orders dated 08-03-2017 of CIT(A), 22, Kolkata for the assessment years 2004-05 and 2005-06 respectively.
At the outset, it is noticed that the Revenue vide an application/letter No. F.No.ACIT(IT)1(1)/Kol./Appeal/2017-18/392 dt. 31-10-2017, copy of the same is on record, submitted that the appellant Revenue wants to withdraw the said appeal(s) by stating as under:- “Subject : Withdrawal of Appeal in the case of M/s.Harnischfeger (U.K) For A.Y 2004-05 & 2005-06 (PAN – AABCH2007E) in & 1332/Kol/2017 – req, thereof Sir, Kindly refer to the above. Appeal was filed before the Hon’ble ITAT, Kolkata Bench on 05-06- 2017 in the case of M/s. Harnischfeger (U.K) for A.Y 2004-05 & 2005-06 vide & 1332/Kol/2017 respectively against the order of Ld. CIT(A)-22, Kolkata. In this case, as the tax effect involved is less than the threshold limit for filing the Appeal as per CBDT Circular No. 21/2015 dated 10.12.2015, I am directed by the CIT(IT & TP), Kolkata to withdraw the appeal. Order of CIT (IT & TP) in this respect is enclosed for your perusal & necessary action at your end. Yours Faithfully, Sd/- (Yogesh Kumar Srivastava) ACIT (IT), Circle-1(1), Kolkata “
3. On the other hand, the ld.AR of the assessee has not objected to withdraw the appeal(s) filed by the Revenue as the both appeals involved in below the tax effect [Rs. 10 lakhs ] in view of said CBDT Circular No. 21/2015 dt. 10-12-2015 and it is not maintainable.
4. In view of above, we decided to dispose of both the appeals on merits/CBDT’s said Circular.
It is seen from the records that the total tax effect challenged by the Revenue before us is admittedly below the tax effect limit prescribed by CBDT vide Circular No. 21 / 2015 dated 10.12.2015 for preferring appeal(s) before Tribunal by the revenue. It will be pertinent to reproduce the relevant portion of the said Circular No. 21 / 2015 dated 10.12.2015 :-
Henceforth, appeals / SLPs shall not be filed in cases where the tax effect does not exceed the monetary limits given hereunder:- S.No. Appeals in Income Tax matters Monetary Limit (in Rs) 1 Before Appellate Tribunal 10,00,000/- 2 Before High Court 20,00,000/- 3 Before Supreme Court 25,00,000/- 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.
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. 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, in the case of an assessee, the disputed issues arise in more than one assessment year, appeal, can be 2 1332/K/17-TE 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: (a) Where the Constitutional Validity of the provisions of an Act or Rule are under challenge, or (b) Where Board’s order, Notification, Instruction or Circular has been held to be illegal or ultra vires, or (c) Where Revenue Audit Objection in the case has been accepted by the Department, or (d) Where the addition relates to undisclosed foreign assets / bank accounts.
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 be governed by the instructions on this subject, operative at the time when such appeal was filed.
We find that intention behind the Circular No.21/2015 dated 10-12-2015 needs to be understood in the following perspective:-
2.2 On perusal of the Circular No. 21 / 2015 dated 10.12.2015 and the materials available on record, we could not see whether the impugned case falls under any of the exceptions contemplated in the said Circular. We also find that the Circular makes it very clear that the revised monetary limits shall apply retrospectively to pending appeals also. We find that the Circular is binding on the tax authorities. This position has been confirmed by the Hon’ble Apex Court in the case of Commissioner of Customs vs Indian Oil Corporation Ltd reported in 267 ITR 272 (SC) wherein their Lordships examined the earlier decisions of the Apex Court with regard to binding nature of the Circulars 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.
Hence we hold that the appeal(s) of the revenue deserve to be dismissed in terms of low tax effect vide Circular No.21 / 2015 dated 10.12.2015. Accordingly, this being a low tax effect case, we dismiss the appeals of the revenue in limine, as unadmitted, without going into the merits of the case. The appeals of the revenue are dismissed.
In the result, the appeals of the revenue are dismissed. Order pronounced in the open court on 30-11-2017