COMMISSIONER OF INCOME TAX-II vs. THAKOREDAS MULCHANDDAS PIPWALA (HUF)

Whether Reporters of Local Papers may be allowed to see the judgment ? NO 2. To be referred to the Reporter or not ? NO 3. Whether their Lordships wish to see the fair copy of the judgment ? NO 4. Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? NO 5. Whether it is to be circulated to the civil judge ? NO ========================================= COMMISSIONER OF INCOME TAX-II - Appellant Versus THAKOREDAS MULCHANDDAS PIPWALA (HUF) - Opponent ========================================= Appearance : MR MANAV A MEHTA for Appellant. MR SN SOPARKAR, SENIOR COUNSEL ASSISTED BY MR B S SOPARKAR for Opponent. ========================================= CORAM : HONOURABLE MR.JUSTICE V. M. SAHAI and HONOURABLE MR.JUSTICE N.V. ANJARIA Date : 30/08/2012 ORAL JUDGMENT

This Tax Appeal has been admitted on the following substantial question of law :- "Whether the Tribunal below committed substantial error of law in deciding the penalty in respect of addition of Rs.13,65,300=00 by totally overlooking the fact that the case before us is one of mis-statement of fact leading to false claim, and as such, clearly comes with the purview of Section 271(1) (c) of the Income-tax Act ?"

Mr. S.N. Soparkar, learned Senior counsel assisted by Mr. Bandish Soparkar appearing for the respondent states that tax effect in this appeal is less than Rs.10 Lacs which is clear from the order of the Tribunal. From the order of the Tribunal, it is clear that for Assessment Year 2001-02, penalty to the tune of Rs.6,05,689/- was levied against the respondent, which was under challenge before the Tribunal and the Tribunal deleted the penalty. In respect of addition of Rs.13,65,300/- and penalty in respect of addition of Rs.2,26,000/- has been confirmed. The tax effect of penalty is less than Rs.10 Lacs.

A Division Bench of this Court in Tax Appeal No.1404 of 2010 in the case of The Commissioner of Income Tax v. Sureshchandra Durgaprasad Khatod (HUF) decided on 24.8.2012 had held in paragraph 8 as under :- "

In view of the aforesaid decisions, we find ourselves in agreement with the view taken by the Bombay High Court and Karnataka High Court that Instruction No.3 of 2011 dated 9.2.2011 would also apply to pending Appeals. Tax Appeals below the tax effect of Rs.10 lakhs is not maintainable."

In view of the aforesaid decision, we find ourselves in agreement with the view taken by this Court in Tax Appeal No.1404 of 2010 that Instruction No.3 of 2011 dated 9.2.2011 would also apply to pending Appeals. Tax Appeals below the tax effect of Rs.10 lakhs is not maintainable.

For the reasons given above, since in this Appeal the tax effect on the quantum of penalty deleted by the Income Tax Appellate Tribunal is less than Rs.10 lakhs fixed under Instruction No.3 of 2011, therefore, this Tax Appeal filed under section 260A of the Income Tax Act, 1961, is dismissed as not maintainable on the ground of monetary limit, without expressing any opinion on merits of the case, leaving the question open to be decided in an appropriate case. This Tax Appeal is accordingly dismissed. [V.M. SAHAI, J.] [N. V. ANJARIA, J.] Savariya