2020 (3) TMI 939 - AT - Income Tax

Revenue's Appeal Dismissed by ITAT: CBDT Circular Upheld

DCIT, Central Circle, Sambalpur Versus Sri Bajrang Kumar Agarwal

The appeal filed by the revenue against the CIT(A)-2, Bhubaneswar's order for the assessment year 2009-2010 was dismissed by the Appellate Tribunal ITAT ... Maintainability of appeal - low tax effect - monetary limit - HELD THAT:- We find that CBDT vide circular No.17/2019 in F.No.279/Misc.142/2007- ITJ(Pt) dated 8th August, 2019, has further liberalized its policy for not filing appeals against the decisions of the appellate authorities in favour of the taxpayers, wherein tax involved is below certain threshold limits, and announced its policy decision not to file, or press, the appeals, before this Tribunal, against the appellate orders favourable to the assessee in the cases in which overall tax effect, excluding interest except when interest itself is in dispute, is ₹ 50,00,000/- or less. This circular, only enhances the monetary limits and gives further relaxation. The old circular, beyond any dispute or controversy, categorically applied to the pending appeals as on the date of issuance of circular. The circular dated 8th August 2019 is not a standalone circular. It is to be read in conjunction with the CBDT circular No. 3/2018 (subsequent amendment thereto), and all it does is to replace paragraph nos. 3 and 5 of the said circular. The Hon'ble Supreme Court in the case of KESHAV POWER LTD. [2019 (8) TMI 811 - SC ORDER] has also applied the Circular No.17/2019 dated 08.08.2019 and has dismissed the appeal holding as since the tax effect involved in the matter is less than ₹ 2 crores, going by the latest circular issued by the CBDT, we see no reason to interfere in this matter. The Special Leave Petition is dismissed, leaving all the questions of law open' - Appeal filed by the Revenue is found to be non-maintainable and hence, dismissed. Issues:1. Appeal filed by the revenue against the order of CIT(A)-2, Bhubaneswar for the assessment year 2009-2010.2. Grounds raised by the revenue including the provisions of section 271(1B) of the I.T. Act, principles of natural justice, and judicial precedents.3. Barred appeal by the revenue due to a 22-day delay and the condonation petition filed.4. Submission regarding the tax effect being below Rs. 50 lakhs and the applicability of CBDT Circular No.17/2019.5. Interpretation and application of CBDT Circular No.17/2019 regarding the tax effect threshold limits.6. Consideration of the Circular in conjunction with previous circulars and its impact on pending appeals.7. Reference to the Supreme Court's application of Circular No.17/2019 in a specific case.8. Request by the Learned D.R. to recall the dismissal of appeals exceeding the tax effect threshold.9. Acceptance of the request to point out wrongly included cases and the assurance of appropriate remedial steps.10. Dismissal of the revenue's appeal based on the principles established by the Supreme Court and the non-maintainability of the appeal.Analysis:The Appellate Tribunal ITAT CUTTACK addressed the appeal filed by the revenue against the CIT(A)-2, Bhubaneswar's order for the assessment year 2009-2010. The revenue raised various grounds, including the alleged ignorance of section 271(1B) of the I.T. Act by the CIT (Appeals) and the violation of principles of natural justice. Additionally, the revenue argued based on judicial precedents, emphasizing the need for adherence to specific decisions. The appeal was initially barred due to a 22-day delay, but the Tribunal, after considering a condonation petition, admitted the appeal for hearing.During the proceedings, the assessee highlighted that the tax effect in the appeal was below Rs. 50 lakhs, citing CBDT Circular No.17/2019. The Tribunal examined the circular, which liberalized the policy for not filing appeals below certain threshold limits. It clarified that the circular should be read in conjunction with previous circulars and applied to pending appeals as of its issuance date. The Tribunal referred to a Supreme Court case applying the circular and dismissing the appeal based on the tax effect criteria.The Learned D.R. requested the Tribunal to reconsider the dismissal of appeals exceeding the tax effect threshold, which was accepted. The Tribunal allowed the appellant to identify cases erroneously included in the dismissed appeals for further review. Ultimately, following the Supreme Court's principles and the interpretation of the Circular, the Tribunal found the revenue's appeal non-maintainable and dismissed it. The decision was based on the established legal framework and the specific circumstances of the case, leading to the final pronouncement of the order on 14/01/2020.