The case ITA No. 5310/Del/2019 involves the appellant Addl. CIT, Special Range-9, New Delhi, contesting an order in favor of the respondent WAPCOS Ltd., New Delhi, for the assessment year 2015-16. The appeal was filed on June 10, 2019, against the order passed by the CIT(A)-10, New Delhi.
The Additional Commissioner of Income Tax (Addl. CIT) filed the appeal to contest certain findings in the assessment order for the year 2015-16, believing that the order by CIT(A) required further judicial scrutiny. However, during the pendency of the appeal, the Central Board of Direct Taxes (CBDT) issued Circular No. 17/2019, which impacted the maintainability of the case.
The appeal was heard by the Income Tax Appellate Tribunal (ITAT) Delhi Bench ‘E’, New Delhi, with Judicial Member Shri H.S. Sidhu and Accountant Member Shri Prashant Maharishi presiding over the case. The hearing took place on September 27, 2019, and the order was pronounced on September 30, 2019.
The appellant, represented by Ms. Rakhi Vimal, Sr. DR, argued that the appeal should proceed despite the recent CBDT circular, contending that the new guidelines should apply prospectively and not to pending appeals.
The respondent, WAPCOS Ltd., was represented by its legal team who brought to the tribunal’s attention that as per the CBDT Circular No. 17/2019 dated August 8, 2019, the revenue would not prefer any appeal before the Tribunal if the tax effect is less than Rs. 50 lakhs. They argued that the appeal should be dismissed based on this instruction.
The ITAT, after considering the arguments from both sides and reviewing the material on record, found that the tax effect in the appeal was below Rs. 50 lakhs. The tribunal referenced the CBDT Circular No. 17/2019, which had enhanced the monetary limits for filing appeals by the department before various judicial authorities. The circular aimed to reduce litigation and streamline the process of tax dispute resolution.
The CBDT Circular No. 17/2019 increased the monetary limits for filing appeals as follows:
The circular also provided guidelines for calculating the tax effect separately for every assessment year and outlined scenarios for composite orders. It explicitly stated that no appeal should be filed if the tax effect is below the specified monetary limit.
In light of the CBDT Circular and the tax effect being below Rs. 50 lakhs, the ITAT dismissed the appeal filed by the Addl. CIT, Special Range-9. The tribunal held that the appeal was not maintainable as the tax effect did not meet the threshold set by the CBDT Circular No. 17/2019.
Order pronounced in the open court on September 30, 2019.
WAPCOS Ltd. Appeal Dismissed by ITAT: Case Analysis for AY 2015-16
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