The case titled DCIT vs. Manupatra Information Solutions (ITA 1762/DEL/2019) involved an appeal filed by the Department of Income Tax against Manupatra Information Solutions Pvt. Ltd. The case was related to the assessment year 2012-13 and was filed on 1st March 2019. The final tribunal order was pronounced on 28th August 2019 by the Delhi Bench ‘B’ of the Income Tax Appellate Tribunal (ITAT). The appeal was dismissed due to the low tax effect, as per Circular No. 17/2019 issued by the Central Board of Direct Taxes (CBDT).
Manupatra Information Solutions Pvt. Ltd., a company based in New Delhi, was assessed for the year 2012-13. The Deputy Commissioner of Income Tax (DCIT), Central Circle-16(1), New Delhi, filed an appeal against the order passed by the Commissioner of Income Tax (Appeals)-6, New Delhi, on 26th December 2018. The department challenged the decision, leading to the appeal being brought before the ITAT.
The main contention of the department was against the separate order passed by the CIT(A)-6. However, during the proceedings, it was brought to the attention of the tribunal that the tax effect involved in the appeal was less than Rs. 50 lakhs. This amount falls within the ambit of Circular No. 17/2019 dated 8th August 2019, which prescribes the tax effect for preferring appeals before the tribunal by the revenue department. The circular was further clarified on 20th August 2019, stating that the revised monetary limits apply retrospectively to pending appeals as well.
After reviewing the materials available on record, the tribunal noted that the disputed amount was below the tax effect limit prescribed by the CBDT’s Circular No. 17/2019. The Senior Departmental Representative (Sr. DR) could not provide any reason why this circular should not apply to the facts of the case. Consequently, the tribunal held that the appeal deserved to be dismissed on account of the low tax effect.
The tribunal’s order stated: “We find that the subsequent clarification dated 20.08.2019 makes it very clear that the revised monetary limits shall apply retrospectively to pending appeals also. The Circular is binding on the tax authorities. Hence, we hold that the appeal of the revenue deserves to be dismissed on account of low tax effect vide Circular No. 17/2019 dated 08.08.2019 and subsequent clarification on 20.08.2019. Accordingly, on account of low tax effect case, we dismiss this appeal of revenue in limine, without going into the merits of the case.“
In conclusion, the appeal filed by the department in the case DCIT vs. Manupatra Information Solutions Pvt. Ltd. was dismissed due to the low tax effect as prescribed by Circular No. 17/2019 and its subsequent clarification. The order was pronounced by the tribunal on 28th August 2019.
The decision highlights the importance of the CBDT’s guidelines in determining the viability of appeals based on the tax effect, ensuring that the department’s resources are utilized efficiently in cases with significant tax implications.
DCIT vs. Manupatra Information Solutions (ITA 1762/DEL/2019): Appeal Dismissed Due to Low Tax Effect
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