Appeal Dismissed: Penalty Cancelled for A.Y. 2009-2010 Below Tax Threshold

The Department's appeal challenging the cancellation of penalty under section 271(1)(c) of the I.T. Act, 1961 for A.Y. 2009-2010 was dismissed due to the tax effect being less than Rs. 20 lakhs, falling below the threshold set by CBDT's Circular No.3/2018. The appeal was not pursued by the Department in compliance with the Circular, leading to its dismissal for not meeting the criteria outlined.

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Issues:
Challenge to cancellation of penalty under section 271(1)(c) of the I.T. Act, 1961 for A.Y. 2009-2010.

Analysis:
The appeal by the Revenue was directed against the Order of the Ld. CIT(A)-23, New Delhi, challenging the cancellation of penalty under section 271(1)(c) of the I.T. Act, 1961, amounting to Rs. 17,54,405. The tax effect in the present appeal was less than Rs. 20 lakhs. As per Circular No.3/2018 issued by CBDT, the Department was directed not to file an appeal before the Tribunal where the tax effect did not exceed Rs. 20 lakhs. The Departmental Appeal was not pressed by the Ld. D.R. in compliance with the Board's Circular. The case of the Department did not fall within the exceptions provided in the Circular. Consequently, the Departmental appeal was deemed not maintainable as it was filed against the Board instructions, leading to its dismissal.

Therefore, the appeal of the Department challenging the cancellation of penalty under section 271(1)(c) of the I.T. Act, 1961 for A.Y. 2009-2010 was dismissed in light of the Circular issued by CBDT, which set a monetary limit of Rs. 20 lakhs for filing appeals before the Tribunal. The Department's failure to meet the criteria outlined in the Circular rendered their appeal not maintainable, resulting in its dismissal.

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