The case involves an appeal by the Deputy Commissioner of Income Tax (DCIT) against Abhipra Capital Ltd for the Assessment Year 2019-20. The appeal was dismissed by the ITAT based on the grounds that the tax effect involved was less than Rs. 50 lakhs, adhering to the guidelines set by CBDT Circular No. 17/2019.
The dismissal highlights the impact of administrative guidelines on the admissibility of appeals in tax cases. The CBDT circular dictates that appeals with a tax effect below Rs. 50 lakhs are not maintainable, aimed at reducing litigation and focusing resources on higher value disputes.
The ITAT evaluated the tax effect involved and determined that it did not meet the threshold required for maintaining an appeal. The tribunal granted liberty to the revenue to re-approach should the tax effect be reassessed above the stipulated threshold.
The decision underscores the importance of administrative guidelines in shaping the litigation strategy of the revenue department and ensuring judicial economy. It also reflects the judiciary’s role in enforcing these guidelines to streamline tax litigation.
The final judgment was pronounced on May 25, 2023, dismissing the revenue’s appeal due to the non-maintainable tax effect as per current guidelines.
Judicial Review: Dismissal of Appeal in DCIT vs. Abhipra Capital Ltd, ITA No.2695/DEL/2022
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