ITO, Ward-1(5), Noida vs Ishwar Singh Mavi – Appeal Dismissed Due to Tax Effect Below CBDT Threshold for AY 2009-10

Case Overview: ITO, Ward-1(5), Noida vs Ishwar Singh Mavi, Assessment Year 2009-10

The case in question involves an appeal filed by the Income Tax Officer (ITO), Ward-1(5), Noida against the order passed in favor of Ishwar Singh Mavi, a resident of Uttar Pradesh, for the assessment year 2009-10. The appeal, registered under case number ITA 6668/DEL/2019, was filed on 9th August 2019, with the final tribunal order being pronounced on 30th September 2019. The primary issue under consideration was whether the appeal by the Revenue was maintainable under the guidelines set forth by the Central Board of Direct Taxes (CBDT) Circular No. 17/2019.

Background of the Case

The Revenue filed an appeal against the order of the Commissioner of Income Tax (Appeals) [CIT(A)], which was in favor of the assessee, Ishwar Singh Mavi. The core issue revolved around the applicability of certain tax liabilities and deductions under the Income Tax Act, 1961. However, during the hearing, it was brought to the attention of the Income Tax Appellate Tribunal (ITAT) that the tax effect involved in the appeal was below the monetary threshold stipulated by the CBDT for filing appeals before the Tribunal.

The CBDT Circular No. 17/2019

On 8th August 2019, the CBDT issued Circular No. 17/2019, which significantly raised the monetary limits for filing appeals by the Revenue before the ITAT, High Courts, and the Supreme Court. The thresholds were set as follows:

• Before the ITAT: Rs. 50,00,000
• Before the High Court: Rs. 1,00,00,000
• Before the Supreme Court: Rs. 2,00,00,000

This circular was aimed at reducing the litigation burden on the judiciary and the Revenue, focusing only on cases with substantial tax implications. The circular explicitly mentioned that the new thresholds would apply to all pending appeals.

The Tribunal’s Consideration

During the hearing on 27th September 2019, the counsel for the assessee pointed out that the tax effect in the current appeal was below Rs. 50 lakhs, making the appeal non-maintainable under the new CBDT guidelines. The counsel referred to the provisions of Circular No. 17/2019 and argued that the Revenue’s appeal should be dismissed as it did not meet the prescribed monetary threshold.

In response, the Department’s representative contended that the circular should not apply retrospectively to pending appeals. However, the ITAT bench, comprising Judicial Member Shri H.S. Sidhu and Accountant Member Shri Prashant Maharishi, noted that the circular explicitly stated its applicability to all pending appeals.

Tribunal’s Decision

The ITAT examined the arguments and the provisions of the CBDT Circular No. 17/2019. The Tribunal concluded that the circular’s intent was clear—to apply to all pending appeals, regardless of when they were filed. Given that the tax effect in this case was below the Rs. 50 lakh threshold, the appeal was deemed not maintainable.

The Tribunal also referenced a similar ruling by the Ahmedabad bench of the ITAT in the case of Dinesh Madhavlal Patel [2019-TIOL-1556-ITAT-AHM], where the applicability of the CBDT circular to pending appeals was affirmed. Based on these precedents, the ITAT dismissed the appeal filed by the Revenue.

Conclusion

In its final order, the ITAT dismissed the appeal filed by the ITO, Ward-1(5), Noida against Ishwar Singh Mavi for the assessment year 2009-10. The dismissal was based on the CBDT Circular No. 17/2019, which set a monetary threshold of Rs. 50 lakhs for appeals before the ITAT. Since the tax effect in this case was below the specified limit, the appeal was not maintainable.

This case highlights the significant impact of the CBDT’s efforts to streamline tax litigation and reduce the burden on both the judiciary and taxpayers by focusing on cases with substantial tax disputes. The Tribunal’s decision to adhere to the guidelines set forth in the circular reinforces the importance of these monetary thresholds in the administration of justice.

The decision serves as a reminder to tax authorities to carefully assess the tax effect before pursuing litigation, ensuring that resources are allocated efficiently and only significant cases are brought before the courts.

ITO, Ward-1(5), Noida vs Ishwar Singh Mavi – Appeal Dismissed Due to Tax Effect Below CBDT Threshold for AY 2009-10