Subject: It is noticed that the CBDT has issued Circular
Referred Sections:
Section 268A of the Income Tax Act,
Section 268 of the Act
Section 115JB
Section 115JC
Section (4)
Section 268A of the Income-tax Act,
Section 12A/12AA of the IT Act,
Section 253(4) of the Act.
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH `B', NEW DELHI
Before Sh. N. K. Saini, AM and Ms. Suchitra Kamble, JM
ITA No. 880/Del/2017 : Asstt. Year : 2013-14
Asstt. Commissioner of Income Vs Devansh Jain
Tax, 6th Floor, 612-618,
Circle-52(1), Room No. 1405, Narain Manzil, 23,
14th Floor Barakhamba Road
E-2 Block, Dr. S.P. Mukherjee New Delhi
Civic Center
New Delhi
(APPELLANT) (RESPONDENT)
PAN No. AFTPJ1036R
Assessee by : Sh. V.K.Garg, Adv.
Revenue by : Sh. V.K. Jiwani, Sr. DR
Date of Hearing : 23.08.2018 Date of Pronouncement : 27 .08.2018
ORDER
Per N. K. Saini, AM:
This is an appeal by the department against the order dated 15.11.2016
of ld. CIT(A)-18, New Delhi.
2. During the course of hearing, the Learned counsel for the
assessee at the very outset stated that the tax effect in this appeal is
less than Rs.20,00,000/-, therefore, the department ought not to
have filed this appeal in view of the Circular No. 3/2018 issued by
the CBDT and the provisions contained in Section 268A of the
Income Tax Act, 1961 (hereinafter to be referred as the Act).
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Devansh Jain
3. On the other hand, the ld. Sr. D.R., although supported the
order of the Assessing Officer, but could not controvert this fact
that tax effect in this appeal is less than Rs.20,00,000/-.
4. After considering the submissions of both the parties and the
material available on record, it is noticed that Section 268A has
been inserted by the Finance Act, 2008 with retrospective effect
from 01/04/99. The said section 268 of the Act provides that the
Board may issue instruction or directions to the other income-tax
authorities fixing monetary limits for not filing the appeals before
the Appellate Tribunal or the Courts, said instructions/directions
are binding on the income tax authorities.
5. It is noticed that the CBDT has issued Circular No. 3 of 2018
dated 11.07.2018, vide which it has revised the monetary limit to
Rs.20,00,000/- for not filing the appeal before the Tribunal, the
said circular reads as under:
"Subject: Revision of monetary limits for filing of appeals
by the Department before Income Tax Appellate Tribunal,
High Courts and SLPs/appeals before Supreme Court-
measures for reducing litigation-Reg.
Reference is invited to Board's Circular No. 21 of 2015
dated 10.12.2015 wherein monetary limits and other
conditions for filing departmental appeals (in Income-tax
matters) before Income Tax Appellate Tribunal, High
Courts and SLPs/ appeals before Supreme Court were
specified.
2. In supersession of the above Circular, it has been
decided by the Board that departmental appeals may be
filed on merits before Income Tax Appellate Tribunal and
High Courts and SLPs/ appeals before Supreme Court
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Devansh Jain
keeping in view the monetary limits and conditions
specified below.
3. Henceforth, appeals/ SLPs shall not be filed in cases
where the tax effect does not exceed the monetary limits
given hereunder:
Appeals/SLPs in Income-tax Monetary
S No
matters Limit (in Rs)
1 Before Appellate Tribunal 20,00,000/-
2 Before High Court 50,00,000/-
3 Before Supreme Court 1,00,00,000/-
It is clarified that an appeal should not be filed merely
because the tax effect in a case exceeds the monetary limits
prescribed above. Filing of appeal in such cases is to be
decided on merits of the case.
4. For this purpose, `tax effect' means the difference
between the tax on the total income assessed and the tax
that would have been chargeable had such total income
been reduced by the amount of income in respect of the
issues against which appeal is intended to be filed
(hereinafter referred to as `disputed issues). Further, `tax
effect' shall be tax including applicable surcharge and
cess. However, the tax will not include any interest thereon,
except where chargeability of interest itself is in dispute. In
case the chargeability of interest is the issue under dispute,
the amount of interest shall be the tax effect. In cases
where returned loss is reduced or assessed as income, the
tax effect would include notional tax on disputed additions.
In case of penalty orders, the tax effect will mean quantum
of penalty deleted or reduced in the order to be appealed
against.
5. The Assessing Officer shall calculate the tax effect
separately for every assessment year in respect of the
disputed issues in the case of every assessee. If, in the case
of an assessee, the disputed issues arise in more than one
assessment year, appeal can be filed in respect of such
4 ITA No. 880/Del/2017
Devansh Jain
assessment year or years in which the tax effect in respect
of the disputed issues exceeds the monetary limit specified
in para 3. No appeal shall be filed in respect of an
assessment year or years in which the tax effect is less than
the monetary limit specified in para 3. In other words,
henceforth, appeals can be filed only with reference to the
tax effect in the relevant assessment year. However, in case
of a composite order of any High Court or appellate
authority, which involves more than one assessment year
and common issues in more than one assessment year,
appeals shall be filed in respect of all such assessment
years even if the tax effect is less than the prescribed
monetary limits in any of the year(s), if it is decided to file
appeal in respect of the year(s) in which tax effect exceeds
the monetary limit prescribed. In case where a composite
order/judgement involves more than one assessee, each
assessee shall be dealt with separately.
6. Further, where income is computed under the provisions
of section 115JB or section 115JC, for the purposes of
determination of `tax effect', tax on the total income
assessed shall be computed as per the following formula-
(A -- B) + (C -- D)
where,
A = the total income assessed as per the provisions other
than the provisions contained in section 115JB or section
115JC (herein called general provisions);
B = the total income that would have been chargeable
had the total income assessed as per the general
provisions been reduced by the amount of the disputed
issues under general provisions;
C = the total income assessed as per the provisions
contained in section 115JB or section 115JC;
D = the total income that would have been chargeable
had the total income assessed as per the provisions
contained in section 115JB or section 1I5JCwas reduced
5 ITA No. 880/Del/2017
Devansh Jain
by the amount of disputed issues under the said
provisions:
However, where the amount of disputed issues is considered
both under the provisions contained in section 115JB or
section 115JC and under general provisions, such amount
shall not be reduced from total income assessed while
determining the amount under item D.
7. In a case where appeal before a Tribunal or a Court is
not filed only on account of the tax effect being less than
the monetary limit specified above, the Pr. Commissioner of
Income-tax/ Commissioner of Income Tax shall specifically
record that "even though the decision is not acceptable,
appeal is not being filed only on the consideration that the
tax effect is less than the monetary limit specified in this
Circular". Further, in such cases, there will be no
presumption that the Income-tax Department has
acquiesced in the decision on the disputed issues. The
Income-tax Department shall not be precluded from filing
an appeal against the disputed issues in the case of the
same assessee for any other assessment year, or in the case
of any other assessee for the same or any other assessment
year, if the tax effect exceeds the specified monetary limits.
8. In the past, a number of instances have come to the
notice of the Board, whereby an assessee has claimed relief
from the Tribunal or the Court only on the ground that the
Department has implicitly accepted the decision of the
Tribunal or Court in the case of the assessee for any other
assessment year or in the case of any other assessee for the
same or any other assessment year, by not filing an appeal
on the same disputed issues. The Departmental
representatives/counsels must make every effort to bring to
the notice of the Tribunal or the Court that the appeal in
such cases was not filed or not admitted only for the reason
of the tax effect being less than the specified monetary limit
and, therefore, no inference should be drawn that the
decisions rendered therein were acceptable to the
Department. Accordingly, they should impress upon the
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Devansh Jain
Tribunal or the Court that such cases do not have any
precedent value and also bring to the notice of the
Tribunal/ Court the provisions of sub section (4) of section
268A of the Income-tax Act, 1961 which read as under :
"(4) The Appellate Tribunal or Court, hearing such
appeal or reference, shall have regard to the orders,
instructions or directions issued under sub-section (1)
and the circumstances under which such appeal or
application for reference was filed or not filed in respect
of any case."
9. As the evidence of not filing appeal due to this Circular
may have to be produced in courts, the judicial folders in
the office of Pr. CsIT/CsIT must be maintained in a
systemic manner for easy retrieval.
10. Adverse judgments relating to the following issues
should be contested on merits notwithstanding that the tax
effect entailed is less than the monetary limits specified in
para 3 above or there is no tax effect:
(a) Where the Constitutional validity of the provisions of
an Act or Rule is under challenge, or
(b) Where Board's order, Notification, Instruction or
Circular has been held to be illegal or ultra fires, or
(c) Where Revenue Audit objection in the case has been
accepted by the Department, or
(d) Where the addition relates to undisclosed foreign
assets/ bank accounts.
11. The monetary limits specified in para 3 above shall not
apply to writ matters and Direct tax matters other than
Income tax. Filing of appeals in other Direct tax matters
shall continue to be governed by relevant provisions of
statute and rules. Further, in cases where the tax effect is
not quantifiable or not involved, such as the case of
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Devansh Jain
registration of trusts or institutions under section 12A/
12AA of the IT Act, 1961 etc., filing of appeal shall not be
governed by the limits specified in para 3 above and
decision to file appeals in such cases may be taken on
merits of a particular case.
12. It is clarified that the monetary limit of Rs. 20 lakhs for
filing appeals before the ITAT would apply equally to cross
objections under section 253(4) of the Act. Cross objections
below this monetary limit, already filed, should be pursued
for dismissal as withdrawn/ not pressed. Filing of cross
objections below the monetary limit may not be considered
henceforth. Similarly, references to High Courts and SLPs/
appeals before Supreme Court below the monetary limit of
Rs. 50 lakhs and Rs. 1 Crore respectively should be pursued
for dismissal as withdrawn/ not pressed. References before
High Court and SLPs/ appeals below these limits may not
be considered henceforth.
13. This Circular will apply to SLPs/ appeals/ cross
objections/ references to be filed henceforth in
SC/HCs/Tribunal and it shall also apply retrospectively to
pending SLPs/ appeals/ cross objections/references.
Pending appeals below the specified tax limits in pare 3
above may be withdrawn/ not pressed.
14. The above may be brought to the notice of all
concerned.
15. This issues under Section 268A of the Income-tax Act
1961."
6. From Clause 12 & 13 of the above said circular it is clear that
these instructions are applicable to the pending appeals also and as
per clause 13, there is clear cut instruction to the department to
withdraw or not to press the appeals filed before the ITAT wherein
tax effect is less than Rs.20,00,000/-. These instructions are
operative retrospectively to the pending appeals.
8 ITA No. 880/Del/2017
Devansh Jain
7. Keeping in view the CBDT Circular No. 3 of 2018 dated
11.07.2018 and also the provisions of Section 268A of Income Tax
Act, 1961, we are of the view that the Revenue should not have
filed the instant appeal before the Tribunal.
8. In the result, the appeal of the department is dismissed.
(Order Pronounced in the Court on 27/08/2018)
Sd/- Sd/-
(Suchitra Kamble) (N. K. Saini)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 27/08/2018
*Binita*
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5.DR: ITAT
ASSISTANT REGISTRAR
9 ITA No. 880/Del/2017
Devansh Jain
Date of dictation 23.08.2018
Date on which the typed draft is placed before 23.08.2018
the dictating Member
Date on which the typed draft is placed before 23.08.2018
the Other Member
Date on which the approved draft comes to the 23.08.2018
Sr. PS/PS
Date on which the fair order is placed before 27.08.2018
the Dictating Member for pronouncement
Date on which the fair order comes back to the 27 .08.2018
Sr. PS/PS
Date on which the final order is uploaded on the 27 .08.2018
website of ITAT
Date on which the file goes to the Bench Clerk .08.2018
Date on which the file goes to the Head Clerk
The date on which the file goes to the Assistant
Registrar for signature on the order
Date of dispatch of the Order
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