Revenue's Appeals Dismissed for Low Tax Effect Under CBDT Circulars - Tribunal Allows Re-institution

The Revenue's appeals against the orders of CWT(A)-12, Pune for various assessment years were dismissed by the Tribunal due to low tax effect, following the application of CBDT circulars on monetary limits for filing appeals in wealth tax matters. The Tribunal emphasized that the limits specified in the circulars applied to pending appeals as well, resulting in the dismissal of Revenue's appeals and the assessee's cross objections without consideration of the merits of the assessments. The Tribunal allowed the Revenue to seek re-institution of appeals if exceptions under the circular were met.

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Issues:
1. Maintainability of appeals by Revenue based on tax effect.
2. Application of CBDT circular on monetary limits for filing appeals in wealth tax matters.
3. Dismissal of Revenue's appeals and assessee's cross objections.

Analysis:
1. The appeals filed by Revenue against the orders of CWT(A)-12, Pune for different assessment years were challenged by the assessee on grounds of low tax effect. The Authorized Representative for the assessee argued that the CBDT's latest clarification specified limits for filing appeals in income tax matters should also apply to wealth tax matters. The Departmental Representative for the Revenue accepted this proposition after reviewing the assessed wealth in each case before the Tribunal.

2. The CBDT circulars, specifically Circular No.3/2018 and Circular No.5/2019, set monetary limits for filing appeals by the Department. The latter circular extended these limits to wealth tax appeals, defining "tax effect" and emphasizing that the limits would apply to pending appeals as well. Consequently, the Tribunal dismissed the Revenue's appeals due to low tax effect, without delving into the merits of the additions made in the assessments. The Cross Objections filed by the assessee were also not pressed and dismissed accordingly.

3. The Tribunal clarified that the Revenue could seek re-institution of appeal if exceptions under the circular were met. Ultimately, all appeals by Revenue and Cross Objections by the assessee were dismissed. The judgment was pronounced on February 27, 2019.

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