ITA No. 1223/DEL/2022 Dismissal Due to Low Tax Effect

ITA No. 1223/DEL/2022: A Case of Dismissal Due to Low Tax Effect

In the realm of tax litigation, the applicability of monetary thresholds for pursuing appeals by the revenue authorities has been a subject of substantial regulatory and judicial discussion. The case of ITA No. 1223/DEL/2022, adjudicated by the Income Tax Appellate Tribunal (ITAT) Delhi Bench ‘H’, serves as a pertinent illustration. The appeal was lodged by the Assistant Commissioner of Income Tax (ACIT), Central Circle – II, Noida against M/s. Tirupati LPG Industries Pvt. Ltd., Delhi, concerning the assessment year 2019-20. This article delves into the nuances of the case, focusing on the judgment pronounced on September 15, 2022, which dismissed the appeal due to the tax effect being below the prescribed limit.

The dispute originated from the order of the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) dated February 24, 2022. At the core of the matter was the interpretation and application of CBDT Circular No.17/2019, which prescribes a monetary limit below which the revenue authorities are advised not to pursue appeals. The circular aimed to reduce litigation and focus the efforts of the tax departments on cases with substantial tax implications.

During the hearing, the appellant’s counsel highlighted that the tax effect involved in the appeal was below the specified threshold of Rs.50 lakhs, as dictated by the aforementioned circular. This led to a consensus among both parties that, in line with the directive, pursuing the appeal further would be counterproductive. Evidently, the tribunal observed that the circular had retrospective effect and its applicability to pending appeals had been affirmed by coordinate benches in similar cases.

Accordingly, the bench, comprising Shri Challa Nagendra Prasad, Judicial Member, and Dr. B.R.R. Kumar, Accountant Member, concluded that the appeal was not maintainable due to the low tax effect, thereby rendering it infructuous. Notwithstanding, it was mentioned that should there be any technical grounds on which the appeal might be considered maintainable at a future date, the department would have the liberty to seek recall of the dismissal order under relevant provisions of law.

The decision underscores the importance of the CBDT Circular No.17/2019 … [Approximately 3800 more words]

ITA No. 1223/DEL/2022 Dismissal Due to Low Tax Effect