Supreme Court dismisses appeals challenging tax relief under CBDT circular guidelines

The Appeals challenging relief granted to taxpayers by Commissioners of Income Tax (Appeals) with tax effect not exceeding Rs. 50,00,000 were dismissed based on the guidelines of CBDT circular No.17/2019. The circular specified monetary limits for filing appeals at different levels and required Assessing Officers to calculate the tax effect separately for each assessment year. The Supreme Court found the appeals non-maintainable and dismissed them, along with the cross objections supporting the orders of the Commissioner (Appeals), on 5th September 2019.

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Issues:
Appeals challenging relief granted to taxpayers by Commissioners of Income Tax (Appeals) with tax effect not exceeding Rs. 50,00,000; Cross objections supporting orders passed by Commissioner (Appeals); Application of CBDT circular No.17/2019 for not filing appeals below specified monetary limits; Interpretation of circular in conjunction with circular No. 3/2018 and subsequent amendments; Dismissal of appeals and cross objections based on circular guidelines; Exception for recalling appeals exceeding monetary limit if covered by exceptions or included inadvertently; Principles laid down by the Supreme Court in similar cases.

Analysis:
The judgment dealt with eleven appeals and cross objections where Assessing Officers challenged the relief granted to taxpayers by the Commissioners of Income Tax (Appeals). The appeals questioned the correctness of the relief and the tax effect involved did not exceed Rs. 50,00,000 in each case. The CBDT circular No.17/2019, dated 8th August 2019, liberalized the policy for not filing appeals against decisions favoring taxpayers below certain threshold limits. The circular specified monetary limits for filing appeals at different levels - Rs. 50,00,000 before the Appellate Tribunal, Rs. 1,00,00,000 before the High Court, and Rs. 2,00,00,000 before the Supreme Court.

The circular required Assessing Officers to calculate the tax effect separately for each assessment year in cases involving disputed issues across multiple years. Appeals were to be filed only for assessment years where the tax effect exceeded the monetary limit specified in the circular. The judgment emphasized that the circular applied to pending appeals as well and provided for withdrawal or non-pursuance of appeals falling below the specified tax limits. The Supreme Court, in a similar case, dismissed an appeal due to the tax effect being below the prescribed limit.

The judgment acknowledged the possibility of appeals being included mistakenly or exceeding the monetary limit due to exceptions. The Court allowed for the recall and restoration of appeals in such cases upon necessary verifications. Following the principles laid down by the Supreme Court in a previous case, the appeals filed by the Revenue were found to be non-maintainable, leading to their dismissal as withdrawn. The related cross objections supporting the orders of the Commissioner (Appeals) were also dismissed as infructuous. The judgment was pronounced on 5th September 2019 after the conclusion of the hearing.

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