Arguments of The Revenue:-
The Departmental Representative (DR) submitted comments from the Assessing Officer (A.O.), asserting that the appeals, despite having a tax effect below the prescribed monetary limit, fall under the exception in paragraph 10(c) of Circular No. 3/2018 and 17/2019, due to tax audit objections accepted by the A.O. upon reopening the assessment. The DR contended therefore these cases should be decided on merits.

Arguments of the Assessee in Rejoinder:
The assessee’s representative countered that the latest Circular No. 5/2024 supersedes earlier circulars issued by the CBDT, which modified the exceptions, eliminating audit objections as an exception. Therefore, the appeals by the revenue are not maintainable and should be dismissed.

Observations of The Hon. ITAT

1. The Assessing Officer has not disputed the fact that the tax effect for these two appeals are only Rs.3,23,712/- and Rs.3,13,567/- for the Assessment Year 2014-15 and 2015-16 respectively

2. Thus the tax effect in these two appeals are below the monetary limit prescribed in the Circular No.3/2018 as well as Circular No.17/2019 which is Rs.50 lakh for filing appeal before the Tribunal.

3. In his report dated 02.07.2024, the A.O. stated that despite the low tax effect, the cases fall under the exception for audit objections in paragraph 10(c) of Circular No. 3/2018.

4. It is pertinent to note that the CBDT has issued the latest circular No.5/2024 dated 15.03.2024 where there is no exception to the monetary limit regarding any audit objection.

5. It is settled position that the CBDT circulars prescribing monetary limits for filing the appeals by the Department are also applicable on the pending appeals on the date of circular. As held by The Hon’ble Bombay High Court in the case of CIT V/s Madhukar K Inamdar HUF 318 ITR 149

6. Accordingly in view of the judgment of Hon’ble Bombay High Court in case of CIT V/s Madhukar K Inamdar HUF (supra), the CBDT Circular No.5/2024 is applicable in the present appeals filed on 27.2.2024 and consequently due to low tax effect the appeals of the revenue are not maintainable and liable to be dismissed.