Involvement of Tax Effect Less than Prescribed Monetary Limit by CBDT for Filing Appeal: ITAT Dismisses Appeal of Revenue [Read Order]

The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) dismissed the appeal filed by the revenue on the ground of the tax effect involved was less than the prescribed monetary limit by the Central Board of Direct Tax (CBDT) for filing the appeal. 

Hotch and Kalachand Loungani, the respondent-assessee submitted written submissions before the tribunal during the hearing of the appeal, and no one appeared on behalf of the assessee. 

The revenue appealed against the order passed by the Commissioner of Income Tax (Appeals) for rejecting the appeal filed by the revenue. 

PS Thuingaleng, the counsel for the revenue contended that the rejection of the appeal by the Commissioner of Income Tax (Appeals) was not as per the law and is liable to be restored. 

It was further submitted that the tax effect was less than the prescribed limit and the issue involved in this appeal was hit by the exception clause no.10 of the Circular No.17 of 2019 of the Central Board of Direct Tax (CBDT )which for the sake of convenience was reproduced by the revenue department and the appeal filed was not liable to be rejected. 

The bench observed that any circular, notification, or instruction of the Board was illegal or ultra vires when it challenged the constitutional validity of any provisions of the Income Tax Act, therefore, this case does not fall within the exception clause. 

The two-member bench comprising Sanjay Garg (Judicial) and Girish Agrawal (Accountant) held that since the tax effect involved was less than the prescribed limit, the present appeal was not maintainable under section 268A of the Income Tax Act, 1961 while dismissing the appeal filed by the revenue. 

To Read the full text of the Order CLICK HERE

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