Appeal & Cross Objection Dismissed: Penalty Below Limits

The appeal by Revenue and Cross Objection by Assessee were dismissed as non-maintainable due to the quantum of penalty being below the prescribed monetary limits for filing appeals before ITAT. The Court applied the relevant circular issued by CBDT and emphasized the objective of reducing pending litigation where the tax effect is small. Consequently, both the appeal of Revenue and Cross Objection of Assessee were dismissed.

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Issues Involved:
1. Whether the appeal of revenue is maintainable considering the prescribed monetary limits for filing appeals before ITAT.
2. Whether the Cross Objection filed by the assessee is maintainable.

Detailed Analysis:

Issue 1: Maintainability of Revenue's Appeal Considering Prescribed Monetary Limits

This appeal by revenue and Cross Objection by assessee are arising out of order of CIT(A)-XIX, Kolkata. The quantum of penalty u/s. 271D of the Act involved is Rs. 4 lakhs, which is below the prescribed monetary limits for filing of appeal before ITAT. The only issue now remains before us is, whether, this appeal of revenue, which is below the prescribed limit of tax effect in view of the Board's Instruction No.5/2014 issued on 10.07.2014 revising the monetary limits for filing of appeals by the Department before ITAT is maintainable or not.

We have heard Ld. Sr. DR and gone through the facts and circumstances of the case. The Hon'ble Delhi High Court in the case of CIT Vs M/s. P. S. Jain & Co. held that the Board's circular dated March 27, 2000 is very much applicable even to the old references which are still undecided. Similarly, Hon'ble Gujarat High Court in the case of CIT v. Sureshchandra Durgaprasad Khatod (HUF) considered instruction No. 3/2011 and held that the same would apply to pending cases as well. The consistent view of the Court has been that the CBDT instruction would apply to pending cases as well. The main objective of such instructions is to reduce the pending litigation where the tax effect is considerably small.

The recent instruction revising the monetary limit to Rs. 4 lakh for filing appeal before ITAT on income tax matters, as issued vide Instruction No.5/2014 dated 10th July, 2014 will apply to pending appeals also for the reason that the same is exactly identical to earlier instructions. The relevant circular issued by CBDT reads that appeals shall not be filed in cases where the tax effect does not exceed the monetary limits given hereunder: Rs. 4,00,000/- before Appellate Tribunal, Rs. 10,00,000/- before High Court, and Rs. 25,00,000/- before Supreme Court.

On query from the Bench, the Ld. DR could not point out any of the exceptions as provided in the Circular. Accordingly, this being a low tax effect case, we dismiss the appeal of the revenue in limine without going into merits.

Issue 2: Maintainability of the Cross Objection Filed by the Assessee

Since the appeal of revenue is dismissed as non-maintainable, the Cross Objection filed by assessee is dismissed being infructuous.

Conclusion:

In the result, both the appeal of Revenue and Cross Objection of assessee are dismissed.

Order pronounced in open court.

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