ITAT Dismisses Income Tax Department's Case for Having Tax Effect Less Than ₹60,00,000: Notes Contravention of CBDT Circular [Read Order]
ITAT clarified that the Revenue may move the Tribunal for recall if it was later found that the tax effect exceeded ₹60 lakhs or that the appeal was maintainable despite the low tax effect
The Kolkata Bench of the Income Tax Appellate Tribunal recently dismissed an appeal filed by the Income Tax Department, noting that the appeal had a tax effect of less than ₹60,00,000 and was thus filed in contravention of the monetary limits laid down by CBDT Circular No. 9/2024.
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The present appeal was preferred by the Income Tax Officer, Ward-2(1), Kolkata against the order of the Commissioner of Income Tax (Appeals)-21, Kolkata dated 20.06.2024 that was passed in favour of the Respondent herein, Rashi Impex Pvt. Ltd.
At the outset, Counsel for the assessee, S. Jhajharia submitted that the Central Board of Direct Taxes had issued Circular No. 9/2024 dated 17.09.2024 which revised the departmental monetary thresholds for instituting appeals. It was submitted that the CBDT CBDT circular fixed the limit for filing appeals before the Tribunal at ₹60,00,000; before High Courts at ₹2,00,00,000 and before the Supreme Court at ₹5,00,00,000.
The circular was issued with the intent of reducing unwanted litigation. The Tribunal noted these submissions and examined the tax effect claimed by the Revenue.
Meanwhile, the Revenue was represented before the Tribunal by Pradip Kumar Mondal, CIT-DR.
The two-member Bench of Pradip Kumar Choubey, Judicial Member and Sanjay Awasthi, Accountant Member observed that the Revenue had filed the present appeal on 07.10.2024 and that the tax effect in dispute fell within the monetary limit prescribed for filing appeals before the Tribunal.
In light of the mandates of the referenced CBDT Circular and the departmental policy reflected therein, the Tribunal held that the Department ought not to have even preferred the present appeal and that filing the appeal was contrary to the policy decision of the Department.
In such regard, the ITAT dismissed the appeal in limine.
As a matter of caution, the Tribunal recorded that if the Revenue subsequently finds the tax effect to exceed ₹60 lakhs or otherwise considers the appeal maintainable despite the low tax effect, it is at liberty to move the Tribunal for recall of the order.
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