Case Number: ITA 5672/DEL/2019
Appellant: ACIT Circle-26(1), New Delhi
Respondent: Vertex International Pvt Ltd, New Delhi
Assessment Year: 2015-16
Case Filed On: 2019-06-28
Order Type: Final Tribunal Order
Date of Order: 2019-09-30
Pronounced On: 2019-09-30
This case involves an appeal filed by the Assistant Commissioner of Income Tax (ACIT), Circle-26(1), New Delhi (the appellant) against Vertex International Pvt Ltd, New Delhi (the respondent). The appeal pertains to the assessment year 2015-16 and was filed on 2019-06-28. The case was heard by the Income Tax Appellate Tribunal (ITAT), Delhi Benches “E”, New Delhi.
The appellant, ACIT Circle-26(1), New Delhi, brought this case against Vertex International Pvt Ltd, New Delhi. The dispute involved the tax effect for the assessment year 2015-16. The matter was heard by the ITAT on 27th September 2019 and the order was pronounced on 30th September 2019.
The appeal was directed against the order of the learned CIT(A), which involved a tax effect less than Rs. 50 lakhs. At the outset of the hearing, the appellant’s representatives brought to the attention of the Tribunal that the Central Board of Direct Taxes (CBDT) had issued Circular No. 17/2019 dated 08th August 2019. This circular enhanced the monetary limits for filing appeals by the department before the Income Tax Appellate Tribunal, High Courts, and the Supreme Court.
The relevant portion of the CBDT Circular No. 17/2019 is as follows:
“2. As a step towards further management of litigation, it has been decided by the Board that monetary limits for filing of appeals in income-tax cases be enhanced further through amendment in Para 3 of the Circular mentioned above and accordingly, the table for monetary limits specified in Para 3 of the Circular shall read as follows:
- Before Appellate Tribunal: Rs. 50,00,000
- Before High Court: Rs. 1,00,00,000
- Before Supreme Court: Rs. 2,00,00,000
3. Further, with a view to provide parity in filing of appeals in scenarios where separate orders are passed by higher appellate authorities for each assessment year vis-a-vis where composite orders for more than one assessment year are passed, para 5 of the circular is substituted by the following para:
“5. The Assessing Officer shall calculate the tax effect separately for every assessment year in respect of the disputed issues in the case of every assessee. If, in the case of an assessee, the disputed issues arise in more than one assessment year, appeal can be filed in respect of such assessment year or years in which the tax effect in respect of the disputed issues exceeds the monetary limit specified in para 3. No appeal shall be filed in respect of an assessment year or years in which the tax effect is less than the monetary limit specified in para 3. Further, even in the case of composite orders/judgments of any High Court or appellate authority which involve more than one assessment year and common issues in more than one assessment year, no appeal shall be filed in respect of an assessment year or years in which the tax effect is less than the monetary limit specified in para 3. In cases where a composite order/judgment involves more than one assessee, each assessee shall be dealt with separately.”
The case was heard by the ITAT on 27th September 2019, with Ms. Rakhi Vimal, Senior DR, representing the revenue. No representative appeared on behalf of the assessee.
The learned DR vehemently objected to the application of the CBDT circular to pending appeals, arguing that it applies prospectively.
The Tribunal, comprising Judicial Member Shri H.S. Sidhu and Accountant Member Shri Prashant Maharishi, reviewed the contentions of both parties. After considering the material on record, the Tribunal found that the CBDT Circular No. 17/2019, which increased the monetary limit for filing appeals, applies to all pending appeals as well.
The Tribunal referred to a precedent set by the coordinate bench in Dinesh Madhavlal Patel [TS-469-ITAT-2019(Ahd)] 2019-TIOL-1556-ITAT-AHM dated 14th August 2019, which held that the circular applies to all pending appeals.
The Tribunal held that the tax effect in the instant case is less than Rs. 50 lakhs, and thus, the appeal is not maintainable. The Tribunal also provided liberty to the revenue to file a miscellaneous application with evidence if certain instances, as stated in para 10 of the CBDT Circular No. 3/2018 dated 11.07.2018, come to their notice.
In conclusion, the appeal filed by the revenue was dismissed as not maintainable due to the tax effect being less than Rs. 50 lakhs. The Tribunal’s decision reflected the principle of managing litigation effectively by adhering to the monetary limits set by the CBDT Circular No. 17/2019.
Order pronounced in the open court on 30th September 2019.
Signed by:
(H.S. SIDHU) JUDICIAL MEMBER
(PRASHANT MAHARISHI) ACCOUNTANT MEMBER
Date: 30th September 2019
Copy forwarded to:
// BY Order //
Assistant Registrar, ITAT, New Delhi Benches, New Delhi
ACIT Circle-26(1), New Delhi vs Vertex International Pvt Ltd, New Delhi – Tax Effect for AY 2015-16
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