Case Law Details
Brief Facts :
Assessing officer has made few additions in his assessment order which were later on deleted by the CIT (A) on merits. Revenue preferred an appeal to the Tribunal against an order of CIT(A). However in this case the tax effect was less than Rs 4 lacs.
Assessee Contention
The assessee contended that the tax effect of the grounds raised in the appeal preferred by the Revenue is below Rs.4 lacs, hence, as per the latest CBDT Instruction No. 5/2014 dated 10.07.2014, the present appeal is not maintainable.
Revenue Contention
The revenue did not object the above submissions of the assessee about the tax effect having below Rs.4 lacs in the grounds of the appeal. It, however, placed reliance on the assessment order and questioned deletion of addition of Rs.4,79,930 made by the Learned CIT(Appeals).
Held by ITAT
In the present appeal, the Revenue has questioned deletion of addition of Rs.4,79,930 made by the Learned CIT(Appeals). The tax effect thereof is below Rs.4 lacs. As per the latest CBDT Instruction No. 5/2014 dated 10.7.2014, the Revenue is not supposed to prefer appeal having tax effect below Rs. 4 lacs against the First Appellate Order before the ITAT. This instruction regarding the pecuniary limit for preferring the appeal before the ITAT by the Revenue has now statutory force under sec. 268A of the Income-tax Act, 1961. Thus, present appeal has been preferred by the Revenue in violation of the said instruction as the said instruction is also applicable in the pending appeals as per the decisions of Hon’ble jurisdictional Delhi High Court in the case of CIT vs. M/s. P.S. Jain & Co. in ITA No. 179/1991 dated 02.08.2010 and in the case of CIT vs. Delhi Race Club Ltd. – order dated 03.03.2011.The present appeal is thus not maintainable and it is dismissed as such.
Comment
Section 268 A as cited by the Hon’ble Tribunal in its order is reproduced as under:
[Filing of appeal or application for reference by income-tax authority.
268A. (1) The Board may, from time to time, issue orders, instructions or directions to other income-tax authorities, fixing such monetary limits as it may deem fit, for the purpose of regulating filing of appeal or application for reference by any income-tax authority under the provisions of this Chapter.
(2) Where, in pursuance of the orders, instructions or directions issued under sub-section (1), an income-tax authority has not filed any appeal or application for reference on any issue in the case of an assessee for any assessment year, it shall not preclude such authority from filing an appeal or application for reference on the same issue in the case of—
| (a) | the same assessee for any other assessment year; or | |
| (b) | any other assessee for the same or any other assessment year. |
(3) Notwithstanding that no appeal or application for reference has been filed by an income-tax authority pursuant to the orders or instructions or directions issued under sub-section (1), it shall not be lawful for an assessee, being a party in any appeal or reference, to contend that the income-tax authority has acquiesced in the decision on the disputed issue by not filing an appeal or application for reference in any case.
(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.
(5) Every order, instruction or direction which has been issued by the Board fixing monetary limits for filing an appeal or application for reference shall be deemed to have been issued under sub-section (1) and the provisions of sub-sections (2), (3) and (4) shall apply accordingly.]
The relevant extract of CBDT Instruction No. 5/2014 dated 10.7.2014 is as under:-
Henceforth appeals shall not be filed in cases where the tax effect does not exceed the monetary limits given hereunder: –
| Appeals in Income-tax matters | Monetary Limit (in Rs) |
| Before Appellate Tribunal | 4,00,000 |
| U/s 260 A before High Court | 10,00,000 |
| Before Supreme Court | 25,00,000 |
Thus the CBDT Instruction states the tax effect Limit, below which the revenue shall not file an appeal to respective appellate authorities. The ITAT in its order in this case has clearly stated that the instruction issued by the CBDT has the statutory force under section 268A of the Income Tax Act 1961, and thus mandatorily needs to be followed by the department. However it is also important to note here that the mandate applies to revenue authorities and not to the assessee.
Analysed by CA Amit Handa
