IN INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C, NEW DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER ITA No.6059/Del/2016 Assessment Year: 2010-11 ACIT, Vs. M/s. Godavari Vanijya Pvt. Cent. Circle-4, Ltd., New Delhi A-43, Phase-II, Noida Extension, Noida PAN :AACCG4016H (Appellant) (Respondent) Appellant by Shri Anil Kr. Misra, CIT(DR) Respondent by Shri Himanshu Agarwal, CA Date of hearing 20.08.2019 Date of pronouncement 03.09.2019 ORDER PER O.P. KANT, A.M.: present appeal by Revenue is directed against order dated 23.09.2016 passed by learned CIT(A)-23, New Delhi, for assessment year 2010-11. 2. At outset, learned counsel for assessee submitted that tax effect involved in appeal of Revenue is below threshold amount of tax effect of filing appeal which has been revised to Rs.50 lakhs by CBDT vide Circular No.17/2019, dated 8th August, 2019, therefore, appeal may be dismissed as infructuous. 2 ITA No.6059/Del/2016 3. On contrary, learned DR though agreed that tax effect involved in appeal is below threshold amount of tax effect of Rs.50, lakhs. However, submitted that said circular should be read as prospective in nature and not applicable over appeals already filed by Revenue. 4. We have heard rival submissions of parties on issue in dispute. We find that Central Board of Direct Taxes (CBDT), New Delhi, under litigation management exercise has specified monetary limit of tax amount for filing appeal by Income Tax Department before various appellate forums. In this regard, CBDT issued Circular No. 3 of 2018 on 11.07.2018 in suppression of earlier Circular No. 21 of 2015 dated 10.12.2015. relevant para of Circular No. 3/2018 are reproduced as under: 2. In supersession of above Circular, it has been decided by Board that departmental appeals may be filed on merits before Income Tax Appellate Tribunal and High Courts and SLPs/ appeals before Supreme Court keeping in view monetary limits and conditions specified below. 3. Henceforth, appeals/SLPs shall not be filed in cases where tax effect does not exceed monetary limits given hereunder: S. Appeals/SLPs in Income-tax Monetary Limit No. matters (Rs.) 1. Before Appellate Tribunal 20,00,000/- 2. Before High Court 50,00,000/- 3. Before Supreme Court 1,00,00,000/- It is clarified that appeal should not be filed merely because tax effect in case exceeds monetary limits prescribed above. Filing of appeal in such cases is to be decided on merits of case. 4. .. 5. . 6. . 3 ITA No.6059/Del/2016 7. . 8. .. 9. .. 10. .. 11. .. 12. 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 para 3 above may be withdrawn/ not pressed. 4.1 Thus, circular directed department to withdraw pending appeals or not to be pressed. This circular was amended on 20.08.2018 to modify para 10 to exclude certain category of appeals though below prescribed tax effect, as under: 10. Adverse judgments relating to following issues should be contested on merits notwithstanding that tax effect entailed is less than monetary limits specified in para 3 above or there is no tax effect: (a) Where Constitutional validity of provisions of Act or Rule is under challenge, or (b) Where Board's order, Notification, Instruction or Circular has been held to be illegal or ultra vires, or (c) Where Revenue Audit objection in case has been accepted by Department, or (d) Where addition relates to undisclosed foreign income/undisclosed foreign assets (including financial assets)/ undisclosed foreign bank account. (e) Where addition is based on information received from external sources in nature of law enforcement agencies such as CBI/ ED/ DRI/ SFIO/ Directorate General of GST Intelligence (DGGI). (f) Cases where prosecution has been filed by Department and is pending in Court. 4 ITA No.6059/Del/2016 4.2 Recently, CBDT vide circular No.17/2009, dated 8th August, 2019 has enhanced prescribed limit of filing appeal before various forums modifying Para-3 of Circular No. 3/2018, dt. 11.07.2018 as under: Reverence is invited to Circular No. 3 of 2018 dated 11.07.2018 (the Circular) of Central Board of Direct Taxes (the Board) and its amendment dated 20th August, 2018 vide which monetary limits for filing of income tax appeals by Department before Income Tax Appellate Tribunal, High Court and SLPs/appeals before Supreme Court have been specified. Representation has also been received that anomaly in said circular at para 5 may be removed. 2. As step towards further management of litigation, it has been decided by Board that monetary' limits for tiling 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 Monetary Limit (Rs.) matters 1. Before Appellate Tribunal 50,00,000 2. Before High Court 1,00,00,000 3. Before Supreme Court 2,00,00,000 3. 4. said modifications shall come into effect from date of issue of this Circular. 4.3 In view of para-4 of Circular No. 17/2019, contention of Ld. DR is that this circular should not apply on pending appeal and circular will be applicable prospectively. 4.4 We find that CBDT by way of Circular No. 17/2019 has only modified para 3 of Circular No. 3/2018 enhancing monetary limit of tax effect for filing appeals before appellate forums and other paras of CBDT Circular No. 3 of 2018, dated 11.07.2018 and its amendment dated 20th August, 2018 are still 5 ITA No.6059/Del/2016 effective and in operation. As said Circular no. 3/2018 is retrospective in nature and present Circular has only modified monetary limit of tax effect for filing appeal, contentions of learned DR are not accepted. 4.5 coordinate Bench of Tribunal in ITA No. 1398/Ahd/2004 (AY: 1998-99) along with other appeals, has held that Circular No. 17/2019 is applicable over pending appeals also. relevant part of decision is reproduced as under: 7. In view of above discussion, 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. 5. In view of aforesaid discussion, present appeal of Revenue, having tax effect below Rs.50.00 lakhs and pending as on date of issue of Circular (supra), is liable to be dismissed, with liberty to Revenue for filing application for recall of order, if case falls in any of category prescribed in Para 10 of Circular No.3/2018 as amended as on 20.08.2018. We order accordingly. 6. In result, appeal of Revenue is dismissed. Order is pronounced in open court on 3rd September, 2019. Sd/- Sd/- [BHAVNESH SAINI] [O.P. KANT] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 3rd September, 2019. RK/-[d.t.d.s] Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi ACIT, Cent. Circle-4, New Delhi v. Godavari Vanijya Pvt. Ltd