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Judgment
Instant appeals are directed against order of the
Income Tax Appellate Tribunal and indisputably the tax effect as
brought to our notice, is less than Rs.20 lac.
A Circular No.21/2015 has been issued by the Central
Board of Direct Taxes dated 10/12/2015 in exercise of its power
u/Sec.268A (1) of the Income-tax Act 1961 in supersession of the
Boards instruction No.5/2014 dt.10/07/2014 regularising the
monetary limits for filing the appeal by the Revenue before the
Tribunal, High Courts and Apex Court with an object for reducing
litigation. Relevant para nos.3, 8, 9 and 10 reads ad infra :-
"3. Henceforth, appeals/SLPs shall not be filed in cases where the tax effect does not exceed the monetary limits given hereunder :-
S. No. Appeals in Income-tax matters Monetary Limit (in Rs.)
1 Before Appellate Tribunal 10,00,000/-
2 Before High Court 20,00,000/-
3 Before Supreme Court 25,00,000/-
It is clarified that an appeal should not be filed merely because the tax effect in a case exceeds the monetary limits prescribed above. Filing of appeal in such cases is to be decided on merits of the case. 4. xxx xxx xxx 5. xxx xxx xxx 6. xxx xxx xxx 7. xxx xxx xxx 8. Adverse judgments relating to the following issues should be contested on merits notwithstanding that the tax effect entailed is less than the monetary limits specified in para 3 above or there is no tax effect: (a) Where the Constitutional validity of the provisions of an Act or Rule are under challenge, or (b) Where Board''s order, Notification, Instruction or Circular has been held to be illegal or ultra vires, or (c) Where Revenue Audit objection in the case has been accepted by the Department, or (d) Where the addition relates to undisclosed foreign assets/bank accounts.
The monetary limits specified in para 3 above shall not apply to writ matters and direct tax matters other than Income tax. Filing of appeals in other Direct tax matters shall continue to be governed by relevant provisions of statute & rules. Further, filing of appeal in cases of Income Tax, where the tax effect is not quantifiable or not involved, such as the case of registration of trusts or institutions under section 12 A
specified in para 3 above and decision to file appeal in such cases may be taken on merits of a particular case.
This instruction will apply retrospectively to pending appeals and appeals to be filed henceforth in High Courts/Tribunals. Pending appeals below the specified tax limits in para 3 above may be withdrawn/not pressed. Appeals before the Supreme Court will be governed by the instructions on this subject, operative at the time when such appeal was filed."
The extract of the paragraphs referred to supra, clearly
indicates that the limits specified in para 3 may not apply to
certain exceptions specified in para 8, at the same time para nos.9
and 10 of the Circular if read conjointly, clearly envisages that the
present instructions will apply retrospectively to all the pending
appeals and appeals to be filed henceforth in High
Courts/Tribunals, subject to exceptions where the tax effect even
if is less than Rs.20 lac, can be preferred in High Courts.
Taking note of the CBDT Circular dt. 10/12/2015 and
the tax effect which indisputably in the instant case is less than
Rs.20 lac, much less than what has been prescribed for filing
appeals before the High Courts, deserves to be dismissed as not
pressed. However, it is made clear that the substantial questions
of law raised in the instant appeal, if any, are left open to be
examined in an appropriate proceeding, if arises in future. At the
same time we consider it appropriate to observe that if the appeal
falls in any of the exceptions as referred to in the Circular dt.
10/12/2015, the Revenue will be at liberty to move an application
for recalling of the order if so advised.
Accordingly, in the light of the CBDT Circular dated
10/12/2015, the appeals stand dismissed as not pressed however
with the liberty to the appellants to revive the same in case of any
difficulty.