I.T.A. Nos.161 & 162/Lkw/2018 1 Assessment Years:2012-13 & 14-15 IN INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH , LUCKNOW BEFORE SHRI A. D. JAIN, VICE PRESIDENT AND SHRI T. S. KAPOOR, ACCOUNTANT MEMBER I.T.A. Nos.161 & 162/Lkw/2018 Assessment Years:2012-13 & 14-15 Jt.C.I.T., Vs. M/s Asfand Akhtar, Special Range, MIG-10/15, KDA Colony, Kanpur. Ganga Vihar, Jajmau, Kanpur. PAN:AEMPA 0823 R (Appellant) (Respondent) Appellant by Shri C. K. Singh (D.R.) Respondent by None Date of hearing 19/08/2019 Date of pronouncement 22/08/2019 ORDER PER T. S. KAPOOR, A.M. These two appeals have been filed by Revenue against separate orders of learned CIT(A), Kanpur dated 05/12/2019 and 07/12/2017 pertaining to assessment years 2012-13 and 2014-15. 2. None appeared on behalf of assessee. However, it was noted that tax effect involved in these appeals does not exceed Rs.50 lakhs, hence these appeals, filed by Department, are not maintainable in view of CBDT s Circular No.17/2019, dated 8th August, 2019, F. No.270/Misc.142/2007-ITJ(Pt.) and is liable to be dismissed as such. 3. We have heard learned D.R. and have gone through material placed on record. Central Board of Direct Taxes, vide Circular I.T.A. Nos.161 & 162/Lkw/2018 2 Assessment Years:2012-13 & 14-15 No.17/2019, dated 8th August, 2019, F. No.270/Misc.142/2007-ITJ(Pt.), has issued direction in supersession of Circular No. 3/2018 dated 11th July, 2018, F.No.279 of Misc.142/2007-ITJ (Pt.), in consonance with power entrusted under section 268A of Income Tax Act, 1961 that no appeal should be filed before Tribunal in case tax effect does not exceed Rs.50 lakhs. In backdrop of CBDT Circular No.17/2019, Ahmedabad Bench of Tribunal, in its recent order passed on 14th August, 2019 in case of Income Tax Officer Ward 3(2), Ahmedabad vs. Dinesh Madhavlal Patel, Ahmedabad and others in ITA No. 1398/Ahd/2004, etc., disposing off 628 appeals and Cross Objections, observed and held as below: These 628 appeals and COs pertain to appeals are filed by various Assessing Officers, all these appeals call into question correctness of relief granted to taxpayers by Commissioners of Income Tax (Appeals) and, most importantly, tax effect involved in all these appeals does not exceed Rs.50,00,000 in each of these appeals. cross objections taken up for hearing are only such cross objections as emanate from these appeals and are broadly in support of orders passed by Commissioner (Appeals). In these cases, in light of discussions with Principal Chief Commissioner of Income Tax (Gujarat) and representatives of Ahmedabad ITAT Bar Association, individual notices are dispensed with; notices of hearing are given only through notice board. 2. It is in this backdrop that we are pleased to take note of very pragmatic and taxpayer friendly policy decision by Government of India for reducing income tax litigation. Vide CBDT circular dated 8th August, 2019, income tax department has further liberalized its policy for not filing appeals against decisions of appellate authorities in favour of taxpayers, wherein tax involved is below certain threshold limits, and announced its policy decision not to file, or press, appeals, before this Tribunal, against appellate orders favourable to assessee in cases in which overall tax effect, excluding interest- except when interest itself is in dispute, is Rs 50,00,000 or less. What it means, in plain words, is that when I.T.A. Nos.161 & 162/Lkw/2018 3 Assessment Years:2012-13 & 14-15 Commissioner (Appeals) gives taxpayer tax relief of upto Rs 50 lakhs in appeal in assessment year, matter ends there and relief so granted by Commissioner (Appeals) cannot be challenged before this Tribunal, that when this Tribunal gives taxpayer relief of upto Rs 1 crore in appeal in assessment year, matter ends there and relief so granted by Tribunal cannot be challenged before Hon ble High Court, and that when Hon ble High Court gives relief of upto Rs 2 crore to taxpayer in appeal in assessment year, that relief cannot be challenged before Hon ble Supreme Court. These monetary threshold limits for filing of appeals by income tax authorities do not take into account interest and other corollaries of tax demands being confirmed such as penalties, except when penalty itself is subject matter of litigation, and prosecutions. enhancement of these monetary limits is at unprecedented scale. monetary limit for appeals before this Tribunal, which was Rs 3,00,000 till 10th July 2014, has been in effect enhanced to almost 1,700% in last five years. This substantial relaxation is certainly huge step which signifies trust reposed by Government of India in decisions of appellate forums, and substantially cuts down time taken in finality of appellate process. It is indeed heartening to note that in one stroke, Government has not only prevented, but has, in effect, set stage for withdrawal of thousands of appeals before this Tribunal and before Hon ble Courts above. In environment in which retrospectivity was attached only to taxation and not to tax reliefs or concessions, such approach is pleasant departure from legacy practices. 3. In view of above factual background and generous concession by this benevolent CBDT circular, all these appeals must be dismissed as withdrawn and related cross objections must be dismissed as infructuous. There is, however, small issue that we must deal with. 4. Smt Aparna Agarwal, learned Departmental Representative, however, has point to make. She points out that circular dated 8th August 2019 is not clearly retrospective inasmuch as it specifically states in para 4 that (t)he said modifications shall come into effect from date of issue of this Circular . It is thus pointed out that this sentence gives impression that is only after date of said circular that departmental appeals I.T.A. Nos.161 & 162/Lkw/2018 4 Assessment Years:2012-13 & 14-15 will not be filed in cases within specified tax effect limits. We are urged to bear in mind impact of this observation while giving effect to circular dated 8th August, 2019. She, however, hastens to add that she is yet to have any specific instructions on issue and she leaves it for bench to take appropriate call. Learned representatives appearing for taxpayers vehemently oppose suggestion implicit in her submissions. All of them are unanimous in their argument that circular must be held to have retrospective application and must equally apply to pending appeals as well. Shri J P Shah, Senior Advocate, points out that circular dated 8th August 2019 is not standalone circular and it is required to be read with old circular no. 3 of 2018 which is what it seeks to modify. This circular, according to learned counsel, only enhances monetary limits and gives further relaxation. He urges us not to read circular in manner so as to nullify underlying approach and object of reducing litigation. Shri Soparkar, learned Senior Advocate, submits that all that present circular does is to modify monetary limits and nothing more, and, therefore, it cannot be treated to follow any other approach other than approach followed in old circular. old circular, beyond any dispute or controversy, categorically applied to pending appeals as on date of issuance of circular. Shri Tushar Hemani, learned Senior Advocate, points out that circular dated 8th August 2019 only gives further relief not only in terms of monetary limits but also in terms of manner in which application of circular to orders dealing with more than one year is to made. Shri S N Divetia, learned counsel for assessee, submits that unlike in cases of earlier CBDT circulars, which used to be in supersession of earlier circulars on issues, circular dated 8th August 2019 only modifies earlier circular which, inter alia, provided for its retrospective application. Our attention is invited to some judicial precedents in support of contention that benevolent circular, such as one in question, is to be given effect in respect of pending appeals as well. Ms Urvashi Shodhan, learned counsel for assessee, points outs that its plainly contrary to scheme of litigation policy of Government of India to give this circular only prospective effect. Shri S K Sadhwani, learned counsel for assessee, invites our attention to letter dated 16th July 2018 issued by Member CBDT to all Principal Chief Commissioners of Income Tax, in context of circular dated 11th July 2018 that I.T.A. Nos.161 & 162/Lkw/2018 5 Assessment Years:2012-13 & 14-15 present circular seeks to modify, seeking report on withdrawal of appeals covered by circular. He then points out that it is old circular is still alive today and only change is with respect to monetary limits. In all fairness, therefore, same approach regarding withdrawal of pending appeals must be followed for this circular as well. On same lines, arguments are advanced by learned representatives which, for sake of brevity and to avoid repetition, we are not referring to in more specific details. In brief rejoinder, learned Departmental Representative graciously leaves matter to us. 5. Having considered rival submissions and having perused material on record, we do not have slightest of hesitation in holding that concession extended by CBDT not only applies to appeals to be filed in future but it is also equally applicable to appeals pending for disposal as on now. Our line of reasoning is this. circular dated 8th August 2019 is not standalone circular. It is to be read in conjunction with CBDT circular no 3 of 2018 (and subsequent amendment thereto), and all it does is to replace paragraph nos. 3 and 5 of said circular. This is evident from following extracts from circular dated 8thAugust 2019: 2. As step towards further management of litigation. it has been decided by Board that monetary limits for filing of appeals in income-tax cases be enhanced further through amendment in Para 3 of Circular mentioned above and accordingly. table for monetary limits specified in Para 3 of Circular shall read as follows: S.No. Appeals/SLPs in Income-tax matters Monetary Limit (Rs.) 1 Before Appellate Tribunal 50,00,000 2 Before High Court 1,00,00,000 3 Before Supreme Court 2,00,00,000 3. Further, with 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 years is passed. para 5 of circular is substituted by following para: I.T.A. Nos.161 & 162/Lkw/2018 6 Assessment Years:2012-13 & 14-15 5. Assessing Officer shall calculate tax effect separately for every assessment year in respect of disputed issues in case of every assessee. If in case of assessee, disputed issues arise in more than one assessment year, appeal can be filed in respect of such assessment year or years in which tax effect in respect of disputed issues exceeds monetary limit specified in para 3. No appeal shall be filed in respect of assessment year or years in which tax effect is less than monetary limit specified in para 3. Further, even in 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 assessment year or years in which tax effect is less than monetary limit specified in para 3. In case where composite order/ judgement involves more than one assessee, each assessee shall be dealt with separately 4. said modifications shall come into effect from date of issue of this Circular. 6. Clearly, all other portions of circular no. 3 of 2018 (supra) have remained intact. portion which has remained intact includes paragraph 13 of aforesaid circular which is as follows: 13. This Circular will apply to SLPs/ appeals/ cross objections/ references to be filed henceforth in SC/HCs/Tribunal and it shall also apply retrospectively to pending SLPs/ appeals/ cross objections/references. Pending appeals below specified tax limits in pare 3 above may be withdrawn/ not pressed. 7. In view of above discussions, we hereby hold that relaxation in monetary limits for departmental appeals, vide CBDT circular dated 8th August 2019 (supra) shall be applicable to pending appeals in addition to appeals to be filed henceforth. I.T.A. Nos.161 & 162/Lkw/2018 7 Assessment Years:2012-13 & 14-15 8. Learned Commissioner (DR) then submits liberty may kindly be given to point out, upon necessary further verifications, and to seek recall dismissal of appeals and restoration of appeals in cases (i) in which it can be demonstrated that appeals are covered by exceptions, and (ii) which are inadvertently included in this bunch of appeals, wherein tax effect, in terms of CBDT circular (supra), exceeds Rs 50,00,000. None opposes this prayer; we accept same. We make it clear that appellants shall be at liberty to point out cases which are wrongly included in appeals so summarily dismissed, either owing to wrong computation of tax effect or owning to such cases being covered by permissible exceptions- or for any other reason, and we will take appropriate remedial steps in this regard. 9. In light of above discussions, all appeals stand dismissed as withdrawn. As appeals filed by Revenue are found to be non-maintainable and as all related cross- objections of assessee arise only as result of those appeals and merely support order of CIT(A), cross objections filed by assessee are also dismissed as infructuous. Ordered, accordingly. 4. Respectfully, following view taken by Ahmedabad Bench of Tribunal (supra), we dismiss these appeals of Revenue. 5. In result, both appeals of Revenue stand dismissed. (Order pronounced in open court on 22/08/2019) Sd/. Sd/. ( A. D. JAIN ) ( T. S. KAPOOR ) Vice President Accountant Member Dated:22/08/2019 *Singh Copy of order forwarded to : 1. Appellant 2. Respondent. 3. Concerned CIT 4. CIT(A) 5. D.R., I.T.A.T., Lucknow Jt. C.I.T., Special Range, Kanpur v. Asfand Akhtar