2019 (8) TMI 1547 - AT - Income Tax

Tribunal Dismisses Revenue Appeals for Exceeding CBDT Circular Limits

Assistant Commissioner of Income Tax, Circle 1 (1), Jabalpur, Income Tax Officer (Exemption), Dy. Commissioner of Income Tax (TDS), Bhopal AND Others Versus Shri Sureshchand Jain, Smt. Gurucharan Kaur Mokha, Shri Manjeet Singh Mokha, Shri Padam Singhania, Shri Harshwardhan Singhania, St. Michale's Society, J.P. Tobacco Prod. Pvt. Ltd., Shri Arun Kumar Tiwari, Shri Anurag Srivastava, Shri Suresh Ku. Upadhyay & Sons, Smt. Jasmeet Kaur Mokha, Shri Sarabjeet Singh Mokha, Shri Ramayan Prasad Dubey, Shri Vimal Agrawal (HUF), Shri Vishwanath Dubey, Shri Mukesh Kumar Jain AND Others

The Tribunal dismissed all Revenue's appeals and related cross-objections due to exceeding revised monetary limits under CBDT Circular No. 17/2019. The ... Maintainability of appeal - low tax effect - HELD THAT:- Since the ‘tax effect’, as computed in terms of Circular 3 of 2018, dated 11/7/2018 issued by the Board u/s. 119 r/w s. 268A of the Act, involved in these appeals filed by the Department does not exceed ₹ 50 lakhs in each of these appeals, they are not maintainable in view of CBDT’s Circular No.17/2019, dated 8th August, 2019, and are liable to be dismissed as such. Since all these appeals are to be disposed on the basis of the monetary limit, as now revised, we have decided to dispose of them by passing a composite order.Revenue’s appeals and the assessees’ COs are being dismissed in limine as withdrawn/not pressed. Issues Involved:1. Applicability of Section 268A of the Income Tax Act.2. Impact of CBDT Circular No. 17/2019 on pending appeals.3. Retrospective application of CBDT Circular No. 17/2019.4. Dismissal of appeals based on monetary limits.5. Liberty to recall dismissed appeals if exceptions apply.Detailed Analysis:1. Applicability of Section 268A of the Income Tax Act:Section 268A of the Income Tax Act mandates that appellate authorities, including the Appellate Tribunal, must consider instructions, directions, and orders issued by the Central Board of Direct Taxes (CBDT) regarding monetary limits for filing appeals. This provision aims to regulate the filing of appeals by the Revenue before different appellate authorities, ensuring that appeals with tax effects below specified thresholds are not pursued.2. Impact of CBDT Circular No. 17/2019 on Pending Appeals:The judgment highlights that the tax effect in these appeals, computed as per Circular 3 of 2018 issued by the CBDT under Section 119 read with Section 268A, does not exceed Rs. 50 lakhs. Consequently, these appeals are deemed non-maintainable under CBDT Circular No. 17/2019, dated 8th August 2019, which revised the monetary limits for filing appeals. The Tribunal decided to dismiss these appeals in a composite order based on the revised monetary limits.3. Retrospective Application of CBDT Circular No. 17/2019:The Tribunal addressed the issue of whether the CBDT Circular No. 17/2019 should apply retrospectively to pending appeals. The Departmental Representative argued that the circular's wording suggested it was not retrospective. However, representatives for the taxpayers contended that the circular should apply to pending appeals as it only modifies the monetary limits set by the earlier Circular No. 3 of 2018, which applied retrospectively. The Tribunal agreed with the taxpayers, holding that the circular should apply to pending appeals as well, ensuring the reduction of litigation in line with the Government's policy.4. Dismissal of Appeals Based on Monetary Limits:The Tribunal referenced a similar decision by the Ahmedabad Bench, which dismissed 628 appeals by the Revenue based on the revised monetary limits. The Tribunal emphasized that the enhanced monetary limits signify the Government's trust in appellate decisions and aim to reduce litigation time. The Tribunal dismissed all the Revenue's appeals and the related cross-objections by the assessees as withdrawn or infructuous, given that the tax effect in each case did not exceed Rs. 50 lakhs.5. Liberty to Recall Dismissed Appeals if Exceptions Apply:Despite dismissing the appeals, the Tribunal granted liberty to the Revenue to seek recall of the dismissal if it could demonstrate that an appeal was wrongly included due to incorrect tax effect computation or if it fell under exceptions listed in the CBDT circular. The Tribunal clarified that any recall would be accompanied by the recall of the corresponding cross-objection, if any, and would be decided per a speaking order after granting an opportunity of hearing to the other side.Conclusion:The Tribunal dismissed all the Revenue's appeals and the related cross-objections by the assessees based on the revised monetary limits set by CBDT Circular No. 17/2019. The Tribunal held that the circular applies retrospectively to pending appeals, aligning with the Government's policy to reduce litigation. The Tribunal also provided the Revenue with the liberty to recall dismissed appeals if exceptions apply, ensuring fair adjudication. The order was pronounced in open court on 23/08/2019.