In a recent case, the High Court of Chhattisgarh observed that an income tax appeal should not be filed merely because tax effect exceeds the monetary limits prescribed.As per the Circular No 5/2024 (F.No.279/ Misc.142/2007-ITJ(Pt)) dated15.03.2024 of Central Board of Direct Taxes (the ‘Board’) vide which monetary limits for filing of income tax appeals by the Department before Income Tax Appellate Tribunal, High Courts and SLP/appeals before Supreme Court have been specified.
The revenue challenged the order passed by the Income Tax Appellate Tribunal, Raipur Bench, Raipur ( the ITAT) which was in favour of assessee ,Shri B.L. Agrawal . The appellant submitted that the Government of India, Ministry of Finance has issued a new circular dated 17.09.2024, in which monetary limits for filing Income Tax Appeals by the department before the High Court has been enhanced to Rs.2 Crores, whereas in the present case the tax liability of the assessee is less than Rs.2 Crore.
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In light of aforesaid circular dated 17/09/2024, the present appeal may be disposed of finally. She further submits that a co-ordinate Division Bench had disposed of a similar matter being TAXC No. 105 of 2024 vide order dated 20.09.2024. Counsel appearing for the other side does not controvert the above submission and submits that this appeal may be disposed of in terms of the order dated 20.09.2024 passed in TAXC No. 105 of 2024.
As per the Circular No 5/2024 (F.No.279/ Misc.142/2007-ITJ(Pt)) dated15.03.2024 of Central Board of Direct Taxes (the ‘Board’) vide which monetary limits for filing of income tax appeals by the Department before Income Tax Appellate Tribunal, High Courts and SLP/appeals before Supreme Court have been specified. Further, exceptions to the monetary limits were also specified vide paras 3.1 and 3.2 of the said Circular.
It is clarified that an appeal should not be filed merely because the tax effect in a case exceeds the monetary limits prescribed by the circular. Filing of appeal in such cases is to be decided on merits of the case. The officers concerned shall keep in mind the overall objective of reducing unnecessary litigation and providing certainty to taxpayers on their Income-tax assessments while taking a decision regarding filing an appeal.
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The modifications shall come into effect from the date of issue of this Circular. This Circular will apply to SLPs/appeals to be filed henceforth in SC/HCs/Tribunal. It shall also apply to the SLPs/appeals pending before Supreme Court/High Courts/ Tribunal, which may accordingly be withdrawn.
A division bench of Justice Ravindra Kumar Agrawal and Chief Justice Ramesh Sinha held that the the tax case got disposed of as the monetary limit (tax liability) in the present case is less than Rs.2 Crores therefore, in light of aforesaid circular (Para-5) dated 17/09/2024.Anmol Sharma appeared for the appellant and Vinay Kumar Jain appeared for the respondent.
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