Appeal Dismissed by ITAT Mumbai for Failing Tax Threshold

The revenue appeal before ITAT Mumbai was dismissed as not maintainable based on a Circular issued by CBDT establishing a tax effect threshold of Rs. 50,00,000 for appeals. Both parties agreed to the dismissal, citing the Circular's directive for revenue to withdraw appeals below the threshold. The Tribunal emphasized strict adherence to the Circular and allowed for a recall if exceptions apply. As the revenue failed to demonstrate an exception, the appeal was dismissed on 27/07/2020 for not meeting the tax effect threshold outlined in the Circular.

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Issues:
1. Maintainability of the revenue appeal based on the Circular issued by CBDT regarding tax effect threshold.

Analysis:
The appeal before the Appellate Tribunal ITAT Mumbai arose from an order by the ld. Commissioner of Income Tax (Appeals) against the assessment order passed under section 143(3) of the Income Tax Act, 1961. Both parties agreed that the revenue appeal should be dismissed as not maintainable in light of a recent Circular issued by the CBDT on 08/08/2019. The Circular directed the revenue to withdraw appeals if the tax effect on disputed issues is less than or equal to Rs. 50,00,000, which is considered binding on revenue authorities. Consequently, the Tribunal dismissed the revenue's appeal following the Circular.

The Tribunal emphasized that the Circular's directions are to be strictly adhered to, and if the revenue can demonstrate that the case falls under exceptions outlined in the Circular, they may file a miscellaneous application for the order's recall. However, absent such evidence, the appeal was deemed not maintainable and was consequently dismissed. The Tribunal pronounced its order on 27/07/2020, indicating that the appeal filed by the revenue was dismissed due to not meeting the tax effect threshold specified in the CBDT Circular.

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