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11-09-2019, Rajendra M. Dev. & Build, Section 2(ea), 17, Tribunal Pune

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4 months 5 days ago #10789 by amit
Section - 2(ea), 17, 132
Order Date - 11-09-2019
Favouring - Partly
Court - Tribunal Pune
Appellant - ACIT
Respondent - Rajendra M. Dev. & Build Pvt. Ltd.
Citation - 919Taxpundit107
Appeal No. - WTA Nos.33 to 35/PUN/2017
Asstt. Year - 2008-09, 2009-10 & 2014-15



Out of this bunch of appeals, appeals filed by Revenue are against respective orders of Commissioner of Wealth Tax (Appeals), relating to assessment years 2008-09 to 2014-15 against respective orders passed under different sections of the Wealth-tax Act, 1957 (in short „the Act‟). The assessee also filed Cross Objections against the said appeals. Further, assessee in the case of Pariwar Marketing Pvt. Ltd. has filed appeals against consolidated order of CWT(A) – 12, Pune dated 20.07.2017.

2. First, we shall take up appeals filed by Revenue in the case of Rajendra M. Dev. & Build Pvt. Ltd. The Revenue has filed appeals for assessment years 2008-09 to 2011-12 & 2014-15, against which the assessee has raised the Cross Objections. First, we take up appeal of Revenue and Cross Objection of assessee relating to assessment year 2008-09.

3. During the course of hearing, it was pointed out by the learned Authorised Representative that the monetary limits for filing the appeals by the Revenue before the Income Tax Tribunal have been enhanced by the Circular No.17/2019 dated 08.08.2019. It was further pointed out by him that consequent to the said Circular, many of the present appeals filed by the Revenue against the wealth tax assessments made against assessee, are not maintainable, as the CBDT vide Circular No.17/2019 dated 08.08.2019 had prescribed enhanced limits for filing / withdrawal of appeals before the Tribunals; further CBDT vide Circular No.5 of 2019 had directed the monetary limits which were proposed by the CBDT Circular No.3/2018 dated 11.07.2018 in respect of income tax appeals, will also apply to the wealth-tax appeals; consequent thereto, the appeals wherein the tax effect is less than Rs.50 lakhs would not be maintainable.

4. The Learned Departmental Representative for the Revenue pointed that the monetary limits have been enhanced for filing of appeals by the Department before Income Tax Tribunals vide Circular No.17/2019 dated 08.08.2019 at Rs.50 lakhs.

5. The learned Authorised Representative for the assessee also pointed out that in all those appeals where the tax effect is less than the limits prescribed by the CBDT, the Cross-Objections filed by the assessee would become academic.

6. We have heard the rival contentions and perused the record. The CBDT vide Circular No.3/2018 dated 11.07.2018 with a step to reduce the litigation before the Income Tax Appellate Tribunals, Hon‟ble High Courts and Hon‟ble Supreme Court had revised the monetary limits for filing the appeals and had prescribed that where the appeal effect is less than Rs.20 lakhs, then such appeals would be withdrawn by the Revenue Department and would not be pressed by the authorities. In this regard, under Para 3, the limits before the respective authorities were prescribed and vide Para 5, the steps for withdrawals of the appeals before the authorities were provided.

7. Consequent thereto, CBDT passed another Circular No.5/19 dated 05.02.2019 and pointed out that as a step towards litigation management; the Board has decided that the monetary limits for filing of appeals in Income-tax appeals, would also apply to Wealth-Tax matters, through extension of the circular to wealth-tax matters in a mutatis mutandis manner and with modifications as prescribed under. The Para 4 of the earlier Circular dated 11.07.2018 was amended and it was prescribed as under :-

"For this purpose, 'tax effect' means the difference between the tax on Net Wealth assessed and the tax that would have been chargeable had such Net Wealth been reduced by the amount of wealth in respect of the issues against which appeals is intended to be filed. 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 case of penalty orders, the tax effect will mean quantum of penalty deleted or reduced in the order to be appealed against."

8. It was further provided that “the monetary limits specified in para 3 above shall not apply to writ matters.”. The said extension of the circular to wealthtax appeals came into effect from the date of the issue of the said circular.

9. Now the CBDT vide its Circular No.17/2019 dated 08.08.2019 hasamended Para 3 of the Circular under which the limits for filing the appeals before the
authorities has been enhanced; in respect of appeals at Tribunal, it is Rs.50 lakhs, before the Hon'ble High Courts, it is Rs.1crore and before the Hon‟ble Supreme Court, it is Rs. 2 crore.

10. Further, in order to bring at par, the status of appeals decided by separate orders for each assessment years vis-à-vis composite orders for more than one assessment year, Para 5 of the Circular is also substituted which reads as under :

"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 assessment year or years in which the tax effect in respect of the disputed issues exceeds the

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