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Income Tax Appellate Tribunal, DELHI BENCH: ‘C’: NEW DELHI
Before: SH. I.C. SUDHIR & SH. O.P. KANT
Appellant by Sh. T. Vasanthan, Sr. DR Respondent by Sh. J.P. Chawla, CA Date of hearing 11.01.2016 Date of pronouncement 19.01.2016 ORDER PER O.P. KANT, A.M.: This appeal by the Revenue is directed against the order dated 29.11.2013 of the learned Commissioner of Income Tax (Appeals) passed for the assessment year 2005-06.
2. Learned Sr. DR considering the grounds and the additions at stake for the Revenue on query fairly submitted that in terms of the CBDT Circular No.21/2015 dated 10th December 2015, the departmental appeal may be treated as not pressed.
3. It may not be out of place to refer to section 268A of the Income-tax Act, 1961 which has been inserted by the Finance Act, 2008 with HBR Chemicals Pvt. Ltd. retrospective effect from 01.04.1999 which mandates the CBDT to issue notifications and circulars as Circular No.21/2015 dated 10th December, 2015 of CBDT, which has revised the monetary limit for filing of the departmental appeal to the ITAT at Rs.10 lac, has been issued under the said provisions by the CBDT. The relevant provision reads as under:- “268A. (1) The Board may, from time to time, issue orders, instructions or directions to other income-tax authorities, fixing such monetary limits as it may deem fit, for the purpose of regulating filing of appeal or application for reference by any income-tax authority under the provisions of this Chapter. (2) Where, in pursuance of the orders, instructions or directions issued under sub-section (1), an income-tax authority has not filed any appeal or application for reference on any issue in the case of an assessee for any assessment year, it shall not preclude such authority from filing an appeal or application for reference on the same issue in the case of— (a) the same assessee for any other assessment year; or (b) any other assessee for the same or any other assessment year. (3) Notwithstanding that no appeal or application for reference has been filed by an income-tax authority pursuant to the orders or instructions or directions issued under sub-section (1), it shall not be lawful for an assessee, being a party in any appeal or reference, to contend that the income-tax authority has acquiesced in the decision on the disputed issue by not filing an appeal or application for reference in any case. (4) The Appellate Tribunal or Court, hearing such appeal or reference, shall have regard to the orders, instructions or directions issued under sub-section (1) and the circumstances under which such appeal or application for reference was filed or not filed in respect of any case. (5) Every order, instruction or direction which has been issued by the Board fixing monetary limits for filing an appeal or application for reference shall be deemed to have been issued under sub-section (1) and the provisions of sub-sections (2), (3) and (4) shall apply accordingly.]”
4. Relevant extracts (paras 1 to 4) from the aforesaid CBDT Circular No. 21 of 2015 dated 10.12.2015 is also reproduced hereunder for ready reference: “Subject : 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.
HBR Chemicals Pvt. Ltd. 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.
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.
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 matter 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.”
We have seen that the monetary limits have been made applicable retrospectively by the CBDT in the said Circular as would be evident from the following extract:- “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.”
In view of the above where the tax effect is admittedly below Rs.10 lac, the appeal filed is dismissed as the said circular is binding on the Revenue. Relying on the aforesaid Circular the departmental appeal, in the light of the submissions of the parties before the Bench, is dismissed.
HBR Chemicals Pvt. Ltd. 7. In the result, the appeal of the Revenue is dismissed.
The decision is pronounced in the open court on 19th January, 2016.