The Income Tax Appellate Tribunal (ITAT) dismissed the appeal filed by the Assistant Commissioner of Income Tax (ACIT), Circle-53(1), New Delhi against the National Federation of Cooperative Sugar Factory Ltd. for the assessment year 2014-15. This case study delves into the details and implications of the tribunal’s decision pronounced on December 13, 2022.
The appeal was initiated by the Revenue Department contesting the order of the Commissioner of Income-tax (Appeals) dated February 27, 2019. However, the crux of the matter in ITA No. 3732/Del/2019 revolves around the application of CBDT Circular No. 17/2019, which sets monetary thresholds for filing appeals.
During the proceedings, the Senior Departmental Representative (Sr. DR) pointed out that the tax effect involved in the case did not exceed Rs. 50 lakhs and no exceptional circumstances, as prescribed under the relevant CBDT circulars, applied. This effectively barred the Revenue from pursuing the appeal at the ITAT level.
The representative for the respondent did not dispute this assertion, aligning with the factual presentation by the Revenue.
The tribunal, led by members Shri Anil Chaturvedi and Shri N.K. Choudhry, upheld the application of the CBDT circulars. They dismissed the appeal, citing the lack of maintainability due to the non-exceedance of the prescribed monetary threshold. This decision underscores the impact of administrative circulars on the litigation strategy of the Revenue Department.
This judgment highlights the fiscal prudence enforced by the CBDT through its circulars, aiming to reduce frivolous litigation and focus resources on higher stake matters. The decision also serves as a precedent for other cases where the monetary limits are pivotal in determining the admissibility of appeals.
The dismissal of ITA 3732/DEL/2019 based on the monetary thresholds established by CBDT circulars illustrates the tribunal’s adherence to administrative guidelines and the broader policy of reducing unnecessary tax litigation. This case serves as a crucial reference for tax professionals and the Revenue alike, emphasizing the necessity of assessing the economic viability of appeals.
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