ORDER :

BHARGAV D. KARIA, J.

Heard learned Standing Counsel Mr.Nikunt K. Raval for the appellant and learned advocate Mr.Manish Shah for the opponent.

1. This tax appeal is filed at the instance of the Revenue under Section-260A of the Income Tax Act, 1961 [for short 'The Act, 1961'] and the same is directed against the order of the Tribunal passed in the tax appeal, whereby, the Tribunal quashed and set aside the order passed by the Commissioner, Income Tax under Section-263 of the Act, 1961.

2. At the outset, the learned advocate Mr.Manish J. Shah, raised preliminary objections with regard to the maintainability of this appeal as according to him, in the appeal, filed by the Revenue tax effect is less than the limit prescribed in the Circular issued by the Central Board of Direct Taxes being Circular No.17 of 2019 dated 08th August, 2019.

3. On the other-hand, the learned Standing Counsel Mr.Manish Shah submitted that the above referred circular would not be applicable in the appeal arising from the order under Section-263 of the Act, 1961.

4. It was pointed out that the Circular No.3 of 2018 dated 11th November, 2018 was issued by the Central Board of Direct Taxes specifying the monetary limits for filing of the tax appeal in income matters by the Department before the Appellate Authority, High Courts and SLP/Appeals before the Supreme Court, pursuant to the policy decision taken by the Department as a measure for reducing litigation.

5. The attention of the Court was drawn to the Paragraph-4 of the Circular No.3 of 2018, which reads thus:

“4. For this purpose, 'tax effect' means the difference between the tax on the total income assessed and the tax that would have been chargeable had such total income been reduced by the amount of income in respect of the issues against which appeal is intended to be filed [herein after referred to as disputed issues]. Further, 'tax effect' shall be tax including applicable surcharge and cess. However, the tax will not include any interest thereon except where chargeability of interest itself is in dispute. In case the chargeability of interest is the issue under dispute, the amount of interest shall be the tax effect. In cases where returned loss is reduced or assessed as income, the tax effect would include notional tax on disputed additions. In case of penalty order, the tax effect will mean quantum of penalty deleted or reduced in the order to be appealed against.”

6. It was, thereafter, pointed out that the aforesaid Circular No.3 of 2018 was modified by Circular No.5 of 2019 dated 5th February, 2019.

The Circular No.5 of 2019 reads as under:-

Circular No.5/2019

F. No. 279/Misc/M-84/2018-ITJ

Government of India

Ministry of Finance

Department of Revenue

Central Board Direct Taxes

Judicial Section

New Delhi, 5th February 2019

Subject:-Monetary limits for filing/withdrawal of Wealth Tax appeals by the Department before ITAT, Hcs and SLPs/appeals before SC through extending the scope of Circular 3 of 2018-Measures for reducing litigation.

Reference is invited to Board's Circular No.3 of 2018 dated 11.07.2018 (hereinafter, referred to as "the Circular") vide which monetary limits for filing of income tax appeals by the Department before Income Tax Appellate Tribunal, High Courts and SLPs/ appeals before Supreme Court were specified. Para 11 of the Circular states that the monetary limits specified in para 3 shall not apply to writ matters and Direct tax matters other than Income tax and filing of appeals in such cases shall continue to be governed by relevant provisions of statute and rules.

2. There is no charge under Wealth Tax Act, 1957 w.e.f 1st April, 2016. Therefore, as a step towards litigation management, it has been decided by the Board that monetary limits for filing of appeals in Income tax cases as prescribed in Para 3 of the Circular shall also apply to Wealth Tax appeals through extension of