Tuesday, January 19, 2016

Revised monetary limit for filing appeal would also apply to pending references in High Court

The disputed issue before the High Court was as under:

Whether revised monetary limit of Rs.20 lacs as specified in CBDT's Circular No. 21/2015 shall apply to pending references in High Courts?

The High Court held as under:

1) To ensure that there is uniformity in respect of filing of appeals the CBDT has fixed threshold limits which would do away with the discretion of the officer to file and pursue the appeal remedy where the tax effect is less than the minimum amounts specified.

2) It is noteworthy that the Circular specifically provides that where the tax effect is higher than that specified in the Circular then the filing of appeal in such cases is to be decided on the merits of the case. Therefore, to enable the Revenue to focus on matters where the tax implication is above Rs.20 lacs only such matters should be agitated in appeal before the High Court according to the Circular.

3) This policy of non-filing and of not pressing and/or withdrawing admitted appeals having tax effect of less than Rs.20 lacs has been specifically declared to be retrospective by the Circular No. 21/2015.

4) There is no reason why the circular should not apply to pending References where the tax effect is less than Rs.20 lacs as the objective of the Circular would stand fulfilled on its application even to pending References more particularly bearing in mind that there are 1149 number of References still awaiting disposal by this Court and a large number of them would have tax effect of less than Rs. 20Lakhs. - CIT v. Sunny Sounds Pvt. Ltd. [2016] 65 taxmann.com 162 (Bombay)

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