2019 (8) TMI 1885 - AT - Income Tax

Department appeals dismissed for tax effect below Rs. 50 lakh threshold under CBDT Circular 17/2019

ITAT Chandigarh dismissed departmental appeals where tax effect was below Rs. 50 lakh threshold. CBDT Circular No. 17/2019 enhanced monetary limit from ... Monetary limit for filing the appeals by the Department before the ITAT - maintainability of appeal on low tax effect - HELD THAT:- In the present case it is an admitted fact that the CBDT vide Circular No. 17/2019 enhanced the monetary limit to Rs. 50,00,000/- for not filing the appeal by the department before the ITAT, earlier this limit was specified at Rs. 20,00,000/- in the original Circular no. 03/2018 dt. 11/07/2018. From the contents of the aforesaid Circular it is crystal clear that the anomaly in the earlier Circular no. 3 of 2018 dt. 11/07/2018 at page 5 has been removed and the limit specified in para 3 of the earlier Circular has been enhanced. It is also not in dispute that the earlier Circular was applicable retrospectively to the pending appeals / cross objections. Now the CBDT simply enhanced the monitory limit and the directions given earlier vide para nos. 12 & 13 of the Circular no. 3 / 2018 dt. 11/07/2018 are still intact which is crystal clear from the language of the Circular no. 17/2019 wherein it has been mentioned that there is enhancement of monetary limit and amendment to Circular no. 3 /2018 for reducing the litigation. We therefore are of the confirmed view that the amended Circular No. 17/2019 now issued by the CBDT is also applicable to the pending appeals as has been specified in para 13 of the original Circular no. 3/2018 dt. 11/07/2018 and that the Department ought not have filed the appeals before the ITAT where the tax effect is Rs. 50 Lacs or less. In view of the aforesaid discussion all the above appeals filed by the Department are dismissed. Issues:Appeals filed by the Department based on monetary limits specified in Circulars - Applicability of Circular No. 17/2019 enhancing the monetary limit from Rs. 20,00,000 to Rs. 50,00,000 - Retrospective application of the Circular to pending appeals.Analysis:The judgment deals with appeals filed by the Department and a cross objection by the Assessee arising from separate orders passed by different CIT(A)s. The contention raised was regarding the maintainability of the appeals by the Department due to the enhanced monetary limit specified in Circular No. 17/2019 issued by CBDT. The Department argued that the Circular was not retrospective, while the Assessee's counsels asserted its retrospective application to pending appeals.Upon considering the submissions, the Tribunal noted that Circular No. 17/2019 increased the monetary limit for filing appeals before the ITAT to Rs. 50,00,000 from Rs. 20,00,000 specified in the earlier Circular. The Tribunal highlighted that the Circular aimed at reducing litigation and clarified the procedure for calculating tax effect for filing appeals in different scenarios involving multiple assessment years or common issues.The Tribunal emphasized that the amended Circular No. 17/2019 was applicable to pending appeals, as specified in para 13 of the original Circular No. 3/2018. It referenced a decision by another Bench supporting the view that the Circular's relaxation in monetary limits applied to pending appeals along with future filings.Consequently, the Tribunal dismissed all appeals filed by the Department, as the enhanced monetary limit should have precluded their filing. The appeal and cross objection by the Assessee in a specific case were also dismissed upon their withdrawal, resulting in the dismissal of all appeals by the Revenue and cross objections by the Assessee.In conclusion, the judgment clarified the retrospective application of Circular No. 17/2019, upheld the enhanced monetary limit for appeals, and emphasized adherence to the Circular's provisions for reducing litigation in income tax matters.