The High Court appellate bench allowed the appeal by holding that the appeal was not barred by the monetary limits specified in Circular No. 3/2018, as the tax effect faced by the appellant in this appeal was less than Rs. 50 lakhs.
The appeal was dismissed. The appellant was at liberty to revive the appeal if it falls outside the ambit of the Circular.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
I.T.A. No. 119 of 2007
02. 20.08.2018
Instant appeal is directed against order of the Income Tax Appellate Tribunal, Cuttack passed in ITA No. 62/CTK/2005 and indisputably the tax effect as brought to our notice, is less than Rs.50 lac.
A Circular No.3/2018 has been issued by the Central Board of Direct Taxes dated 11.07.2018 in exercise of its power u/sec. 268A of the Income-tax Act, 1961 which reads as under:-
Circular No.3/2018
“F No 279/Misc. 142/2007-ITJ (Pt)
New Delhi the 11th July, 2018
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.
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3 . Henceforth, appeals/ SLPs shall not be filed in cases where the tax effect does not exceed the monetary limits given hereunder:
| S. No. | Appeals/ SLPs in Income- tax matters |
Monetary Limit (Rs.) |
|---|---|---|
| 1. | BeforeAppellateTribunal | 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.
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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.
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 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
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total income assessed while determining the amount under item D.
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 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 :
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"(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."
(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 vires, or
(c) Where Revenue Audit objection the case has been accepted by the Department, or
(d) Where the addition relates to undisclosed foreign assets/ bank accounts.
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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.
In view of the above, the appeal stands dismissed.
The appellant is at liberty to revive this appeal if it is not coming within the ambit of the above Circular.
.…….......……………… ( K.S. Jhaveri ) Chief Justice
…………………..……… ( Dr. B.R. Sarangi) Judge
AD
3 issues framed by the court
Whether an income tax appeal challenging the Department not filing an appeal in subsequent years can be treated as acquiescence given the monetary limits in Circular No. 3/2018.
Whether the monetary limits for departmental appeals under Circular No. 3/2018 apply to cross objections under section 253(4).
Whether appeals involving constitutional validity or illegal circulars fall within the monetary limits specified in Circular No. 3/2018.
Colour shows how this judgement treated each authority
5 provisions across 2 enactments
K.S. Jhaveri
Dr. B.R. Sarangi
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
