COMMISSIONER OF INCOME TAX, vs. JOHN GEEVARGESE

Facts

This is a tax appeal filed by the Commissioner of Income Tax (Revenue) against an order of the Income Tax Appellate Tribunal (ITAT). The appeal was admitted on two substantial questions of law concerning the quashing of orders passed by the CIT under Section 263 of the Income Tax Act, 1961. These orders related to undisclosed investment in shops and undisclosed cash donations amounting to Rs. 54,03,000/-. Initially, the appeal was disposed of by the High Court on 14th June, 2016, due to the tax effect not exceeding the monetary limit prescribed by CBDT Circular No. 21/2015. However, the appeal was later restored to file by a Misc. Civil Application. The Revenue clarified that Circular No. 21/2015 was initially applicable only to fresh appeals, but a subsequent circular (Circular No. 3/2018) clarified its retrospective application to pending appeals.

Held

The High Court disposed of the appeal as not pressed. The Court noted that the tax effect in the present case was less than Rs. 15 Lakhs. In view of CBDT Circular No. 21/2015, as clarified by Circular No. 3/2018, which provides revised monetary limits for filing departmental appeals, the revenue's counsel submitted that the appeal would not be pressed. The Court accepted this submission and accordingly disposed of the appeal. The specific findings on the substantial questions of law framed at the time of admission were not adjudicated on merits. The operative direction was that the appeal stands disposed of as not pressed.

Key Issues

The High Court was to decide the following substantial questions of law: 1. Whether the Appellate Tribunal was right in law and on facts in quashing the order passed by the CIT under Section 263 of the Act relating to undisclosed investment in shops? 2. Whether the Appellate Tribunal was right in law and on facts in quashing the order passed by the CIT under Section 263 of the Act relating to undisclosed income of Rs. 54,03,000/-, by way of receipt of cash donations? Contentions: Revenue (Appellant): The revenue had filed the appeal. However, at the time of hearing, the learned senior standing counsel for the revenue clarified that the appeal would not be pressed. This was in light of the monetary limits prescribed by CBDT Circular No. 21/2015 and subsequently Circular No. 3/2018, which indicated that appeals with a tax effect below a certain threshold should not be filed or pursued. The tax effect in the present case was stated to be less than Rs. 15 Lakhs. Assessee (Opponent): No specific contentions were recorded for the assessee as the appeal was not pressed by the revenue.