×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
These are the latest case laws decided by various Income Tax Appellate Tribunals (ITAT) of India on Income Tax which have been published recently. The case laws are open for discussion and we invite expert comments from our members on its applicability and effect on relevant issues.
This is an appeal filed by the Revenue against the order dated 2.1.2018 of learned Commissioner of Income Tax (Appeals), Patiala [(in short ‘CIT(A’)] The assessee has filed Cross Objection against the same
2. During the course of hearing, learned counsel for the assessee, at the very outset, stated that the appeals filed by the department are not maintainable in view of Circular No.3/2018 dated 11.7.2018 issued by the CBDT wherein the monetary limit for tax effect for filing the appeal before the ITAT has been increased to Rs.20 lakhs.
3. The ld.CIT DR, submitted that Circular No.3/2018 is not a blanket bar on filing of appeals before ITAT and para 10 details the exceptions to file the appeal where tax effect is less than Rs.20 lakhs and also clarifies that in cases where tax effect is less than Rs.20 lakhs or where tax effect cannot be quantified as in the case of Registration u/s 12AA, the monetary limit would not be applicable. It was further submitted that the aforesaid circular No.3/18 has been amended vide letter F.No.279/Misc.142/2007-ITJ(Pt) dated 20th July, 2018 as under:-
(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 vi es, or
(c) where Revenue Audit objection in the case has been accepted by the Department, or
(d) where addition relates to undisclosed foreign income/undisclosed foreign assets including financial assets/undisclosed foreign bank account.
(e) where addition is based on information received from external sources in the nature of law enforcement agencies such as CBI/ED/DRI/SFIO/Directorate General of GST Intelligence (DGGI).
(f) cases where prosecution has been filed by the department and is pending in the court.
4. After considering the submissions of the ld. D.R. and the material on record. In our opinion, the amended circular is not applicable to the facts of the present case rather it is covered by the original circular No.3/18 dated 11.07.2018, vide which the CBDT has revised the monetary limit to Rs.20,00,000/- for not filing the appeal before the Tribunal, the said circular reads as under:
“Sub ject : Rev is ion of monetary l im its for fi l ing of appea ls by the Department be fore Income Tax Appe l late T r ibuna l , High Cou rts and SLPs /appea ls be fore Sup rem e Cou rt-measu res for reduc ing l it igat ion-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 Incometax 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 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:
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