What did the Tribunal hold?

The Tribunal held that the appeals were covered by Circular No. 21/2015, which sets a monetary limit for filing appeals. Since the tax effect was below the prescribed limit, the appeals were dismissed.

The Revenue filed appeals against the orders of the CIT(A) for the assessment year 2005-06. The tax effect involved in these appeals was less than Rs. 10 lakhs.

What were the issues?

The primary issue was whether the appeals filed by the Revenue were maintainable before the Tribunal given the low tax effect, in light of the CBDT's circular on monetary limits for appeals.

ITO vs R. Narendra | ITAT Bangalore 2016

Income Tax Appellate Tribunal, BANGALORE BENCH A, BANGALORE

Before: SHRI. ABRAHAM P. GEORGE & SHRI. VIJAYPAL RAO

For Appellant: Shri. G. Venkatesh, Advocate

2. I. T. A. No.339/Bang/2013 (Assessment Year : 2005-06) Income tax Officer, Ward -1(1), Chamarajanagar .. Appellant v. 1. Shri. R. Narendra PAN : ALCPN1972B 2. Smt. Asha Narendra, PAN : ALRPN9157D No.7/479-D, Venkateshwara Nilaya, Southern Extension, Kollegala .. Respondents Assessee by : Shri. G. Venkatesh, Advocate Revenue by : Dr. P. K. Srihari, Addl. CIT Heard on : 06.01.2016 Pronounced on : 06.01.2016 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER :

ITA.338/Bang/2013 Page - 2

These are appeal filed by Revenue directed against orders dated 30.11.2012 of CIT (A), Mysore, for the A. Y. 2005-06, in respect of assesses who are husband and wife.

When the appeals were taken up for hearing, the Bench pointed out to the parties that tax effect involved in these appeals was less than Rs.10 lakhs for the impugned assessment year, therefore by virtue of Circular 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 these 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.”

ITA.338/Bang/2013 Page - 3

The tax effect on the issues that are disputed by the Revenue is less than Rs.10 lakhs for the impugned assessment year. Assessees had not challenged the constitutional validity of any provisions of the Act nor had they challenged the legality of the Circular. Revenue has not brought to our notice anything to show that the appeals arose on an issue emanating from any Revenue Audit Objections accepted by the Department. Addition 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 these cases. However if Revenue find that appeals arise out of issues emanating from audit objection it will be free to file MPs for recalling this order.

With the above observations appeals of the Revenue are therefore dismissed.

Pronounced in the open court on this 6th day of January, 2016.

ITO vs. R. NARENDRA,

What did the Tribunal hold?

What were the facts?

What were the issues?

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