ITAT dismisses appeal due to low tax effect, upholds monetary limits for filing appeals

The appeal filed by the revenue against the order of CIT(A)-4, Hyderabad for the assessment year 2013-14 was dismissed by the ITAT Hyderabad due to the tax effect being less than Rs. 20 lakh, in accordance with Circular No. 3/2018 issued by the CBDT. The Tribunal emphasized the importance of adhering to monetary limits for filing appeals, leading to the dismissal of both the revenue's appeal and the Cross Objection filed by the assessee. The decision underscores the Tribunal's commitment to reducing tax litigation in cases where the tax effect is below the specified threshold.

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Issues:
- Appeal filed by revenue against order of CIT(A)-4, Hyderabad for 2013-14.
- Applicability of Circular No. 3/2018 dated 11.07.2018 issued by CBDT regarding monetary limit for filing appeals.
- Dismissal of appeal and consequential order on the basis of the tax effect being less than Rs. 20 lakh.

Analysis:
1. The appeal before the Appellate Tribunal ITAT Hyderabad was filed by the revenue against the order of CIT(A)-4, Hyderabad for the assessment year 2013-14. The appeal was also accompanied by a Cross Objection (CO) filed by the assessee against the same order.

2. The Tribunal noted that as per Circular No. 3/2018 dated 11.07.2018 issued by the CBDT, appeals should not be filed where the tax effect does not exceed Rs. 20 lakh. In the present case, the tax effect was found to be less than the specified limit. Therefore, the Tribunal concluded that the appeal deserved to be dismissed as not pressed or maintainable. However, the Tribunal clarified that the issues raised in the appeal could be examined in future proceedings if necessary. Additionally, the Revenue was given the option to move an application for recalling the order in case the appeal fell under any exceptions mentioned in the circular.

3. Consequently, in accordance with the CBDT Circular No. 3/2018, the Tribunal dismissed the appeal filed by the revenue. Since the revenue appeal was dismissed, the CO filed by the assessee was deemed infructuous and was also dismissed on the same grounds.

This judgment highlights the importance of complying with the monetary limits set by the CBDT for filing appeals and emphasizes the need to consider such limits before pursuing litigation. The decision showcases the Tribunal's adherence to the circular's directives and its commitment to reducing tax litigation where the tax effect falls below the specified threshold.

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