Case Number: ITA 5981/DEL/2019
Appellant: ITO Ward-55(5), New Delhi
Respondent: Sanjay Goyal, Noida
Assessment Year: 2015-16
Order Type: Final Tribunal Order
Date of Order: 2019-09-30
Pronounced On: 2019-09-30
Introduction:
This case involves an appeal filed by the Income Tax Officer (ITO), Ward-55(5), New Delhi, against Sanjay Goyal, a resident of Noida, for the assessment year 2015-16. The appeal was taken up by the Income Tax Appellate Tribunal (ITAT) Delhi Bench ‘E’, presided over by Judicial Member Shri H.S. Sidhu and Accountant Member Shri Prashant Maharishi.
Background:
The case was brought before the ITAT following an appeal by the Revenue against the order of the Commissioner of Income Tax (Appeals) [CIT(A)], which was in favor of the respondent, Sanjay Goyal. The main issue revolved around the assessment for the year 2015-16 and the subsequent tax effect, which was later determined to be below the threshold established by the Central Board of Direct Taxes (CBDT).
At the outset, it was noted by the assessee’s representatives that the CBDT had issued Circular No. 17/2019 dated 08th August 2019, which raised the monetary limits for filing appeals. Specifically, the circular stated that the Revenue would not prefer any appeal before the ITAT if the tax effect was less than Rs. 50 lakhs. The representative argued that the appeal should be dismissed as per this instruction.
Circular No. 17/2019 and Its Impact:
The Circular No. 17/2019 was a significant step towards managing litigation more effectively. It increased the monetary limits for filing appeals by the department to Rs. 50 lakhs before the ITAT, Rs. 1 crore before High Courts, and Rs. 2 crores before the Supreme Court. This move was aimed at reducing the volume of litigation and allowing the department to focus on cases involving substantial tax amounts.
The circular also provided guidelines for cases where a composite order involves more than one assessment year or multiple assessees, ensuring consistency in filing appeals. The instructions in the circular were intended to apply to all pending appeals as well as new cases.
Tribunal’s Decision:
In the hearing held on 27th September 2019, the Department’s representative objected to the application of the circular to the present case, arguing that it should apply prospectively and not to pending appeals. However, after hearing both sides and reviewing the circular’s provisions, the Tribunal concluded that the instructions in Circular No. 17/2019 were indeed applicable to all pending appeals.
The Tribunal noted that the tax effect involved in the appeal was below Rs. 50 lakhs, falling well under the threshold established by the circular. Consequently, the Tribunal determined that the appeal filed by the Revenue was not maintainable under the new guidelines.
Furthermore, the Tribunal acknowledged that while there are exceptions in the circular that allow for appeals in cases involving substantial questions of law or issues that have a wide impact, such exceptions were not discernible from the assessment and appellate orders in this particular case.
As a result, the Tribunal dismissed the appeal filed by the Department, stating that the appeal was not maintainable due to the tax effect being below the prescribed limit. The Tribunal also mentioned that the Department could file a miscellaneous application if any exceptions or specific circumstances came to light that would warrant a different outcome.
Conclusion:
The ITAT’s decision in ITA 5981/DEL/2019 highlights the importance of adhering to the guidelines established by the CBDT for managing litigation effectively. The dismissal of the appeal due to the tax effect being below the threshold reinforces the department’s focus on significant cases and reduces unnecessary litigation.
This case serves as a reminder of the evolving landscape of tax litigation, where thresholds and guidelines play a critical role in determining the maintainability of appeals. The Tribunal’s decision underscores the need for careful consideration of circulars and instructions issued by the CBDT when filing appeals in the future.
Final Judgment:
The appeal filed by the Income Tax Officer, Ward-55(5), New Delhi, against Sanjay Goyal, Noida, for the assessment year 2015-16, is dismissed as the tax effect is below the threshold limit of Rs. 50 lakhs, as per CBDT Circular No. 17/2019.
Order Pronounced: 30th September 2019
Judges: Shri H.S. Sidhu (Judicial Member) and Shri Prashant Maharishi (Accountant Member)
Reference: INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH “E”, NEW DELHI
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