ITAT dismisses appeals with tax effect below Rs. 50 lakhs under CBDT Circular 17/2019, allows recall for exceptions

The ITAT Chandigarh dismissed appeals with tax effect below Rs. 50 lakhs following CBDT Circular No. 17/2019. The Tribunal noted that appeals should not be filed where tax effect does not exceed Rs. 50 lakhs, referencing the Ahmedabad Bench's disposal of 628 appeals. However, the Tribunal granted liberty to parties to move for recall if appeals fall under exceptions in paragraphs 10 or 11 of the Circular, acknowledging possible errors in calculating tax effect. Appeals may be recalled and heard on merits if satisfied.

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Issues Involved:
1. Tax effect threshold for filing appeals.
2. Application of CBDT Circular No. 17/2019 to pending appeals.

Summary:

Issue 1: Tax Effect Threshold for Filing Appeals

This is Revenue's appeal against the order of the ld. CIT(A)-5, Ludhiana, dated 30.11.2016, for the Assessment Year 2012-13. The ld. Counsel for the assessee pointed out that the tax effect involved in this appeal is less than the monetary limit prescribed by the CBDT. The records confirmed that the tax effect does not exceed Rs. 50 lakhs, making the appeal non-maintainable under CBDT's Circular No. 17/2019, dated 8th August, 2019.

Issue 2: Application of CBDT Circular No. 17/2019 to Pending Appeals

The Central Board of Direct Taxes (CBDT) issued Circular No. 17/2019, enhancing the monetary limits for filing appeals to Rs. 50 lakhs for the Tribunal, Rs. 1 crore for the High Court, and Rs. 2 crores for the Supreme Court. This circular is not standalone and modifies Circular No. 3/2018, which applies retrospectively to pending appeals. The Tribunal, referencing the Ahmedabad Bench's decision, held that the circular applies to both future and pending appeals. The Tribunal dismissed the Revenue's appeal due to the low tax effect, granting liberty to the parties to move the Tribunal if any error in tax effect computation or exceptions apply.

Conclusion:

The appeal of the Revenue was dismissed for low tax effect, in accordance with the CBDT Circular No. 17/2019.

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