PRINCIPAL COMMISSIONER OF INCOME TAX vs. LOKENDRA KHANDELWAL

Facts

The appeal was filed by the Principal Commissioner of Income Tax, Jaipur-II against an order passed by the Income Tax Appellate Tribunal (ITAT) on June 30, 2023. The assessee is Lokendra Khandelwal. The appellant (Revenue) contended that despite the tax effect being below ₹2 crores, the appeal was preferred based on Exception 3.1(h) of the Circular dated March 15, 2024, issued by the CBDT. The respondent (assessee) argued that the tax effect was only ₹1.09 lakhs and prayed for the dismissal of the appeal. The High Court perused the ITAT order and the circular.

Held

The High Court held that the present case does not fall within Exception 3.1(h) of the Circular dated March 15, 2024. Consequently, no case for interference was made out. The Court found no reason to deviate from the general principle that appeals with a tax effect below ₹2 crores are not to be preferred, as the specific exception cited by the Revenue was not applicable. The appeal was therefore dismissed. No issue was expressly left undecided.

Key Issues

1. Whether the present appeal falls under Exception 3.1(h) of the Circular dated March 15, 2024, issued by the CBDT, thereby justifying an appeal despite the tax effect being below ₹2 crores? (Question of law) Assessee's contention: The tax effect is only ₹1.09 lakhs, and therefore, the appeal should be dismissed. Revenue's contention: The case falls under Exception 3.1(h) of the Circular dated March 15, 2024, justifying the appeal.