2019 (8) TMI 1945 - HC - Income Tax

Tax department appeal rejected as not maintainable due to low tax effect under enhanced Rs 1 crore limit

The HC dismissed the revenue's tax case appeal as not maintainable due to low tax effect, in view of the enhanced monetary limit of Rs. 1 crore prescribed ... Maintainability of appeal before High court on low tax effect - Estimating the income at low rate - ITAT directing the AO to estimate the income at 5% of the total turnover - HELD THAT:- As monetary limit for filing or pursuing an appeal before the High Court has been increased to Rs. 1 Crore. The above tax case appeal is dismissed on account of the low tax effect. The substantial question of law framed is left open. Revenue filed an appeal under Section 260A of the Income Tax Act, 1961 against the Income Tax Appellate Tribunal's order dated 21.09.2011 for the block period 01.04.1986 to 13.02.1996, challenging the Tribunal's direction to estimate the assessee's income at 5% of total turnover. The substantial question of law was whether the Tribunal was right in so directing 'when the income has not been estimated by the Assessing Officer at 8% as assumed by the Income Tax Appellate Tribunal and there is no case for estimating the income at such a low rate.' At hearing, Revenue submitted that the appeal would not be pursued due to low tax effect in terms of CBDT Circular No. 17/2019 dated 08.08.2019, which enhances the monetary limit for High Court appeals to Rs. 1 crore. As the tax effect was below this threshold, the appeal was dismissed on account of low tax effect, with the substantial question of law left open and liberty to restore if the threshold is later found to be exceeded.