This article delves into the Income Tax Appellate Tribunal’s decision in ITA 5242/DEL/2019, where the appeal by the DCIT against Cvent India Pvt. Ltd. for the assessment year 2015-16 was dismissed based on the low tax effect.
The appeal was filed by DCIT, Circle-6(2), New Delhi against Cvent India Pvt. Ltd., challenging the order for the assessment year 2015-16. The appeal was filed on June 7, 2019, and the final tribunal order was pronounced on September 30, 2019.
During the tribunal proceedings, it was highlighted that as per CBDT Circular No. 17/2019 dated August 8, 2019, the tax effect threshold for filing appeals before the ITAT was raised to Rs. 50 lakhs. The Bench was informed that the tax effect involved in the current appeal was below this threshold.
The Department’s representative objected to dismissing the appeal based on the circular, arguing it should apply prospectively and not to pending appeals. However, the Tribunal referred to precedent that supported the applicability of the circular to pending cases. Consequently, the appeal was deemed not maintainable as the tax effect was less than Rs. 50 lakhs.
The decision underscored the tribunal’s adherence to CBDT guidelines limiting litigations where the financial impact does not meet the specified threshold. It also reaffirmed the binding nature of CBDT’s instructions on tax authorities, promoting a more efficient and focused approach to tax litigation.
The Tribunal’s decision to dismiss the appeal in ITA 5242/DEL/2019 due to the tax effect being below the monetary limit highlights the ongoing efforts to reduce unnecessary tax litigations and underscores the importance of administrative circulars in shaping legal precedents.
DCIT vs. Cvent India Pvt. Ltd.: ITA 5242/DEL/2019 Dismissal Due to Low Tax Effect
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