What did the Tribunal hold?

The Tribunal noted that the tax effect was below the monetary limit of Rs. 50,00,000/- as per CBDT Circular No. 17/2019. The Revenue's representative also sought liberty to withdraw the appeal.

The Revenue filed an appeal before the ITAT against an order of the CIT(Appeals) for Assessment Year 2005-06. The tax effect involved in the appeal was below the monetary limit prescribed by the CBDT for filing appeals.

What were the issues?

The primary issue was whether the appeal should be entertained given the low tax effect, in light of CBDT circulars aimed at reducing litigation.

ITO vs Shri Kedar Agarwal, Raipur (Cg) | ITAT Raipur 2022

Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR

Before: SHRI RAVISH SOOD & SHRI G D PADMAHSHALI

For Appellant: Shri R.B Doshi, CA

For Respondent: Shri G.N Singh, Sr. DR

Hearing: 19.10.2022Pronounced: 19.10.2022

आदेश / ORDER

PER RAVISH SOOD, JM:

The present appeal filed by the revenue is directed against the order passed by the CIT(Appeals), Raipur, dated 15.03.2014, which in turn arises from the order passed by the A.O. u/s. 143(3) of the Income-tax Act, 1961 (for short ‘Act’), dated 24.12.2007 for A.Y. 2005-06.

Central Board of Direct Taxes (CBDT) vide Circular No. 17/2019 dated 08.08.2019 has amended Circular No. 3/2018 dated 11.07.2018 for further enhancement of monetary limit for filing of appeals by the Department before the ITAT, High Courts and SLPs/Appeals before Supreme Court as measures for reducing litigation.

CBDT vide Circular No. 3/2018 dated 11.07.2018 has specified that appeals shall not be filed before the Income Tax Appellate Tribunal (ITAT) in cases where the tax effect does not exceed the monetary limit of Rs.20,00,000/-. 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 issues against which appeal is intended to be filed. Further, ‘tax effect’ shall be taxes including applicable surcharge and cess. However, the tax will not include any interest thereon, except where chargeability of interest itself is in dispute. In case the chargeability of 3 Income Tax Officer, Ward-1(3) Vs. Shri Kedar Agarwal ITA No. 117/RPR/2014 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 order, the tax effect will mean quantum of penalty deleted or reduced in the order to be appealed against.

At para 13 of the above Circular, it has been mentioned that:

“13. This Circular will apply to SLPs/appeals/cross objection/references to be filed henceforth in SC/HCs/Tribunal and it shall also apply retrospectively to pending SLPs/appeals/cross objections/references. Pending appeals below the specified tax limits in para 3 above may be withdrawn/not pressed.”

As a step towards further management of litigation, CBDT vide Circular No. 17/2019 has fixed the monetary limit for filing of appeals before ITAT at Rs.50,00,000/-.

In the instant appeal filed by the Department the tax effect involved is below the monetary limit of Rs.50,00,000/-. The said fact was brought to our notice by the Ld. DR. Our attention was drawn by the Ld. DR to a letter dated 18.10.2022, wherein he had sought liberty to withdraw the present appeal.

4 Income Tax Officer, Ward-1(3) Vs. Shri Kedar Agarwal ITA No. 117/RPR/2014

Considering the aforesaid facts, the present appeal involving a tax effect of less than Rs.50,00,000/- is dismissed.

Order pronounced in open court on 19th day of October, 2022

ITO, WARD- 1(3), RAIPUR (CG) vs. SHRI KEDAR AGARWAL, RAIPUR (CG)

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