In a recent case, the Supreme Court while observing the monetary limits for filing of income tax appeals by the department dismissed the revenue appeal with respect to the low tax effect.
The aforesaid appeal was filed by the revenue related to the case with Jagson International LtD. Senior Counsel Mr. Arijit Prasad appearing for the appellant(s) submitted that “these appeals could be disposed of having regard to the low tax effect vide Notification dated 08.08.2019 at Instruction No.17 of 2019”
As per the Notification dated 08.08.2019 at Instruction No.17 of 2019”the Central Board of Direct Taxes enhanced the specified monetary limits for filing of income tax appeals by the Department before Income Tax Appellate Tribunal. High Courts and SLPs/appeals before the Supreme Court .
Further, with a view to provide parity in filing of appeals in scenarios where separate order is passed by higher appellate authorities for each assessment year vis-a-vis where composite order for more than one assessment year is passed.
Moreover as per the circular para 5 of the circular is substituted by the following para:
“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 monetary limit specified in para 3. No appeal shall be filed in respect of an assessment year or years in which the tax effect is less than the monetary limit specified in para 3. Further, even in the case of 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, no appeal shall be filed in respect of an assessment year or years in which the tax effect is less than the monetary limit specified in para 3. In cases where a composite order/ judgment involves more than one assessee. each assessee shall be dealt with separately.”
The division bench of the supreme court comprising B.V. Nagarathna and Sanjay Kumar dismissed the revenue appeal with respect to the low tax effect.
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