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Income Tax Appellate Tribunal, MUMBAI BENCH “I”, MUMBAI
Before: SHRI SAKTIJIT DEY & SHRI ASHWANI TANEJA
This appeal has been filed by the revenue against the order of the ld. CIT(A)-X, Mumbai dt. 18.5.2006 passed against the assessment order u/s. 143(3) dt. 28.3.2005 for A.Y 2002-03 on the following grounds:
“1. On the facts and in the circumstances of the case as well as in law, the learned CIT(A) has erred in deleting the addition made on account of lease rentals amounting to Rs.27,34,113/- ignoring the fact that lease rentals paid to group companies were not genuine and was found by the Assessing Officer to be a device to evade tax.
2. The appellant prays that the order of CIT(A) on the above grounds be set aside and that of the ITO/AC/DC be restored.”
During the course of hearing it was brought to our notice jointly by both the parties that the tax effect in this appeal was less than Rs. 10 lacs and thus, the appeal filed by the revenue was not maintainable in view of CBDT circular no. 21 of 2015 dt. 10.12.2015.
We have gone through the orders of the lower authorities as well as circular no. 21 of 2015 dt. 10.12.2015. The relevant paragraph of the circular is reproduced below.
“3. Henceforth appeals/SLPs shall not be filed in cases where the tax effect does not exceed the monetary limits given hereunder:- Sl. No. Appeals in Income-tax matters Monetary limits (in Rs.) 1 Before Appellate Tribunal 10,00,000 2 Before High Court 20,00,000 3 Before Supreme Court 25,00,000 .............................................................................................................................
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. ..………………………………………………………………………………….
Adverse judgments 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.
The monetary limits specified in para 3 above shall not apply to writ matters and direct tax matters other than Income tax. Filing of appeals in other Direct tax matters shall continue to be governed by relevant provisions of statute & rules. Further, filing of appeal in cases of Income Tax, where the tax effect is not quantifiable or not involved, such as the case of registration of trusts or institutions under section 12A of the IT Act, 1961, shall not be governed by the limits specified in para 3 above and decision to file appeal in such cases may be taken on merits of a particular case.
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 the appeal filed by the revenue is not maintainable in view of the aforesaid circular of the Board, and therefore, same is dismissed. We clarify that our order should have no bearing on the merits of the issue involved in this appeal.
In the result, the appeal of the revenue is dismissed.
Order pronounced in the open court on 24th February, 2016.