ITO 2(1)(1), MUMBAI vs. ABHIMAN STEEL LTD, MUMBAI

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ITA 3555/MUM/2011Status: DisposedITAT Mumbai18 May 2016AY 2004-055 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the CBDT circular No. 21/2015, which sets a monetary limit of Rs. 10 lakhs for filing appeals before the Tribunal, is binding on the Revenue. Since the tax effect was below this limit, the appeals were not maintainable.

What were the facts?

The Revenue filed appeals against the CIT(A)'s orders for AY 2003-04 and 2004-05. The tax effect involved in these appeals was less than Rs. 10 lakhs.

What were the issues?

Whether the Revenue's appeals are maintainable before the Tribunal when the tax effect is below the monetary limit prescribed by the CBDT circular.

Which sections of the Income-tax Act were involved?

Not explicitly mentioned, but relates to appeal filing criteria based on tax effect.

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, “A” BENCH, MUMBAI

Before: SHRI B.R.BASKARAN, AM & SHRI AMARJIT SINGH, JM

Hearing: 11.01.2016Pronounced: 18.05.2016

Heard together (2 matters)

I.T.A. No.5448/Mum/2010
I.T.A. No. 3556/Mum/2011

Read from the judgment's own cause title. This page is filed under one of them.

Assessee by: None Department by: Shri. Somanath S. Ukkali सुनवाई क" तार"ख / Date of Hearing: 11.01.2016 घोषणा क" तार"ख /Date of Pronouncement: 18.05.2016 आदेश / O R D E R PER AMARJIT SINGH, JM: A.Y. 2010-11 These appeals filed by the Revenue against the order of learned Commissioner of Income Tax (A) 4, Mumbai dated 02.02.2011 and 13.04.2010 for the assessment year 2003-04 and 2004-05 respectively.

2. At the time of hearing, it was noticed that the tax effect involved in this appeal on the disputed issues is less than Rs.10 lakhs. For the sake of convenience, we tabulate below the relevant details:-

S.No. Name of assessee Amount in Penalty deleted or dispute(for reduced by Ld quantum appeal) CIT(A) In Rs. in Rs. 1 Abhiman Steel Ltd. 43,53,459/- (A.Y.2003-04) 2 Abhiman Steel Ltd. 24,40,395/- (A.Y.2004-05) 3 Abhiman System & Software 16,28,730/- Ltd. (A.Y.2004-05)

3. We notice that the revenue is contesting the decision of Ld CIT(A) in granting relief to the extent stated above and hence the tax effect involved on the above said disputed amounts works out to less than Rs.10 lakhs. Recently the CBDT has issued a circular No.21/2015 dated 10.12.2015 prescribing new monetary limits for preferring appeals against the orders passed by Ld CIT(A) before the Tribunal. The relevant portion of the circular cited above reads as under:

“F No 279/Misc. 142/2007-ITJ (Pt) Government of India Ministry of Finance Department of Revenue Central Board Direct Taxes Circular No. 21/2015 2 A.Y. 2010-11 New Delhi the 10th December, 2015 Sub :Revision of monetary limits for filing of appeals by the Department before Income Tax Appellate Tribunal and High Courts and SLP before Supreme Court - measures for reducing litigation – Reg Reference is invited to Board's instruction No 5/2014 dated 10.07.2014 wherein monetary limits and other conditions for filing departmental appeals (in Income-tax matters) before Appellate Tribunal and High Courts and SLP before the Supreme Court were specified.

2.

In supersession of the above instruction, it has been decided by the Board that departmental appeals may be filed on merits before Appellate Tribunal and High Courts and SLP before the Supreme Court keeping in view the monetary limits and conditions specified below.

3.

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.

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.

3 A.Y. 2010-11

5. ………. 6……… 7. …… 8. ……. 9. …..

10.

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.” 11. …..” It can be noticed that the CBDT has further clarified that this new circular/instruction shall apply retrospectively, i.e., even to the pending appeals. It is also stated that the quantum of penalty deleted or reduced shall be considered for determining the monetary limits.

4.

It is well settled proposition that the circulars issued by the CBDT are binding on the Income Tax Authorities. For this proposition, one may gainfully refer to the decisions rendered by the Hon’ble Supreme Court in the case of Azadi Bachao Andolan (2003)(177 Taxation 775) and Pradip J Mehta Vs. CIT (2008)(300 ITR 231). Hence, the latest circular issued by the CBDT (referred supra) is binding on the income tax authorities. Accordingly, we find merit in the submissions of Ld A.R that this appeal of the revenue is not maintainable, since tax effect involved in this appeal is less than 4 A.Y. 2010-11 Rs.10 lakhs. Accordingly, we dismiss all the appeals filed by the revenue.

5.

Accordingly, all the appeals of the Revenue are dismissed.

Order pronounced in the open court on 18th May, 2016 (AMARJIT SINGH) (B.R.BASKARAN) लेखा सद"य / ACCOUNTANT MEMBER "या"यक सद"य/JUDICIAL MEMBER मुंबई Mumbai; "दनांक Dated : 18th May, 2016 MP MP MP MP

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