The case ITA No. 5321/DEL/2019 involves the appellant ACIT, Circle-74(1), Delhi, contesting an order in favor of the respondent Fortis Hospitals Ltd., Delhi. The appeal was filed on June 11, 2019, against the order passed by the Commissioner of Income Tax (Appeals)-41, New Delhi, dated March 29, 2019, relating to the assessment year 2016-17.
The ACIT, Circle-74(1), Delhi, filed the appeal to contest the decision of the CIT(A) that held that the tax effect in the case was below the threshold specified by the Central Board of Direct Taxes (CBDT) Circular No. 17/2019 dated August 8, 2019. The Circular stated that the revenue would not prefer any appeal before the Tribunal if the tax effect is less than Rs. 50 lakhs.
The appeal was heard by the Income Tax Appellate Tribunal (ITAT) Delhi Bench ‘E’, New Delhi. The bench was presided over by Judicial Member Shri H.S. Sidhu and Accountant Member Shri Prashant Maharishi. The hearing took place on September 27, 2019, and the order was pronounced on September 30, 2019.
The appellant, ACIT, Circle-74(1), argued that the CBDT Circular No. 17/2019 should apply prospectively and not to pending appeals. Therefore, they contended that the appeal should be heard and decided based on the merits of the case.
The respondent, Fortis Hospitals Ltd., argued that the CBDT Circular No. 17/2019 was applicable to all pending appeals as well. They emphasized that the tax effect in the present case was below Rs. 50 lakhs, and hence, the appeal should be dismissed in accordance with the Circular.
The ITAT reviewed the submissions made by both parties and observed that the CBDT Circular No. 17/2019 dated August 8, 2019, indeed applied to all pending appeals. The Circular enhanced the monetary limit for filing appeals by the department before the Income Tax Appellate Tribunal, High Courts, and the Supreme Court to Rs. 50 lakhs, Rs. 1 crore, and Rs. 2 crores respectively.
The following details were crucial in the tribunal’s decision:
The ITAT upheld the decision of the CIT(A) that the tax effect in the present case was below the threshold specified by the CBDT Circular No. 17/2019. The tribunal noted that the Circular was applicable to all pending appeals, and hence, the appeal filed by ACIT, Circle-74(1), Delhi, was dismissed. The order was pronounced in the open court on September 30, 2019.
Fortis Hospitals vs. ACIT Circle-74: Appeal on Tax Effect Limit for Assessment Year 2016-17
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