Case Number: ITA 5982/DEL/2019
Appellant: ACIT, Circle-62(1), New Delhi
Respondent: Subodh Gupta, Delhi
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 Assistant Commissioner of Income Tax (ACIT), Circle-62(1), New Delhi, against Subodh Gupta, a resident of Delhi, 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, Subodh Gupta. The primary issue in the appeal was related to the assessment for the year 2015-16, and the Revenue sought to challenge the CIT(A)’s decision. However, the tax effect involved in the case was later determined to be below the threshold established by the Central Board of Direct Taxes (CBDT).
Circular No. 17/2019 and Its Impact:
At the outset of the hearing, the respondent’s representatives highlighted the CBDT Circular No. 17/2019 dated 08th August 2019, which raised the monetary limits for filing appeals by the Revenue. Specifically, the circular stipulated that the department would not prefer any appeal before the ITAT if the tax effect was less than Rs. 50 lakhs. This circular was part of an effort to manage the litigation burden and allow the department to focus on cases with substantial tax effects.
The respondent’s representatives argued that the appeal should be dismissed in light of this circular, as the tax effect in this case was below the specified threshold. The department’s representative, however, objected, arguing that the circular should apply only to future cases and not to those that were already pending.
Tribunal’s Analysis:
After considering the arguments from both sides, the Tribunal referred to the provisions of Circular No. 17/2019. The circular explicitly increased the monetary limits for filing appeals to Rs. 50 lakhs for ITAT, Rs. 1 crore for High Courts, and Rs. 2 crores for the Supreme Court. These limits were intended to reduce the volume of cases being contested by the Revenue, ensuring that only significant cases with higher tax implications were pursued.
The Tribunal also noted that the circular applied to all pending cases, not just new appeals. The Board’s instructions were binding on the Income Tax authorities, meaning that even in ongoing cases where the tax effect was below the prescribed threshold, the appeals should not be pressed by the Revenue.
Tribunal’s Decision:
Based on the facts of the case and the guidelines set out in Circular No. 17/2019, the Tribunal determined that the tax effect in the present appeal was indeed below Rs. 50 lakhs. As a result, the Tribunal concluded that the appeal filed by the Revenue was not maintainable under the revised guidelines.
Moreover, 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 widespread impact, such exceptions were not applicable in this particular case. The Tribunal did, however, provide the Revenue with the liberty to file a miscellaneous application if any new evidence or exceptions came to light that would warrant reconsideration of the case.
Conclusion:
The ITAT’s decision in ITA 5982/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 emphasizes the department’s focus on significant cases, reducing 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 Assistant Commissioner of Income Tax, Circle-62(1), New Delhi, against Subodh Gupta, Delhi, 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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