C I T JAIPUR vs. SHRI TIKAM KHANDELWAL

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ITA/38/2012HC RajasthanRJHC02066694201229 May 20173 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the instant appeal, with a tax effect indisputably less than Rs. 20 lac (which is below the monetary limit prescribed for filing appeals before the High Courts), deserves to be dismissed as not pressed, in light of CBDT Circular dated 10.12.2015. The Court clarified that the substantial questions of law raised in the appeal, if any, are left open to be examined in an appropriate proceeding in the future. The Court also noted that if the appeal falls within any of the exceptions mentioned in the Circular dated 10.12.2015, the Revenue is at liberty to move an application for recalling the order. Consequently, the appeal was dismissed as not pressed.

What were the facts?

This is an appeal by the Commissioner of Income Tax (CIT), Jaipur, against an order of the Income Tax Appellate Tribunal (ITAT). The tax effect in dispute is less than Rs. 20 lac. The Central Board of Direct Taxes (CBDT) issued Circular No. 21/2015 on December 10, 2015, under Section 268A(1) of the Income-tax Act, 1961, to reduce litigation by regularizing monetary limits for filing appeals. The circular specifies monetary limits for appeals before the ITAT (Rs. 10,00,000/-), High Courts (Rs. 20,00,000/-), and the Supreme Court (Rs. 25,00,000/-). It also outlines exceptions where appeals should be contested on merits regardless of tax effect, such as challenges to constitutional validity or where Board's orders are held illegal. The circular applies retrospectively to pending appeals.

What were the issues?

1. Whether the appeal filed by the Revenue before the High Court is maintainable given that the tax effect is less than the prescribed monetary limit of Rs. 20,00,000/- for High Court appeals, as per CBDT Circular No. 21/2015. Assessee's Contention: The assessee implicitly relies on the CBDT Circular No. 21/2015, which sets monetary limits for filing appeals. Since the tax effect is below the prescribed limit for High Court appeals, the appeal should not be entertained. Revenue's Contention: The Revenue's appeal is filed against the ITAT order. While the judgment focuses on the High Court appeal, the underlying issue is the maintainability of the appeal based on the tax effect and the applicability of the CBDT circular. The Revenue would likely argue that the appeal should be heard on merits if it falls under any exceptions or if the circular's application is contested. However, no specific arguments from the Revenue are recorded in the provided text.

Which sections of the Income-tax Act were involved?

Section 268A(1),Section 12A

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 38 / 2012 C I T Jaipur ----Appellant Versus Shri Tikam Khandelwal ----Respondent _____________________________________________________ For Appellant(s) : Mr. Anil Mehta. For Respondent(s) : Ms. Manisha Surana for Mr. Mahendra Gargeiya. _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE DR. JUSTICE VIRENDRA KUMAR MATHUR

Order 29/05/2017

Instant appeal is directed against order of the Income Tax Appellate Tribunal and indisputably the tax effect as brought to our notice, is less than Rs.20 lac. A Circular No.21/2015 has been issued by the Central Board of Direct Taxes dated 10.12.2015 in exercise of its power u/sec. 268A (1) of the Income-tax Act 1961 in supersession of the Boards instruction No.5/2014 dt.10.7.2014 regularising the monetary limits for filing the appeal by the Revenue before the Tribunal, High Courts and Apex Court with an object for reducing litigation. Relevant para nos.3, 8, 9 and 10 reads ad infra :- “3. Henceforth, appeals/SLPs shall not be filed in cases where the tax effect does not exceed the monetary limits given hereunder :-

(2 of 3) [ITA-38/2012]

S. No. Appeals in Income-tax matters Monetary Limit (in Rs.) 1 Before Appellate Tribunal 10,00,000/- 2 Before High Court 20,00,000/- 3 Before Supreme Court 25,00,000/- It is clarified that an appeal should not be filed merely because the tax effect in a case exceeds the monetary limits prescribed above. Filing of appeal in such cases is to be decided on merits of the case. 4. xxx xxx xxx 5. xxx xxx xxx 6. xxx xxx xxx 7. xxx xxx xxx

8.

Adverse judgments relating to the following issues should be contested on merits notwithstanding that the tax effect entailed is less than the monetary limits specified in para 3 above or there is no tax effect: (a) Where the Constitutional validity of the provisions of an Act or Rule are under challenge, or (b) Where Board's order, Notification, Instruction or Circular has been held to be illegal or ultra vires, or (c) Where Revenue Audit objection in the case has been accepted by the Department, or (d) Where the addition relates to undisclosed foreign assets/bank accounts.

9.

The monetary limits specified in para 3 above shall not apply to writ matters and direct tax matters other than Income tax. Filing of appeals in other Direct tax matters shall continue to be governed by relevant provisions of statute & rules. Further, filing of appeal in cases of Income Tax, where the tax effect is not quantifiable or not involved, such as the case of registration of trusts or institutions under section 12 A of the IT Act, 1961, shall not be governed by the limits specified in para 3 above and decision to file appeal in such cases may be taken on merits of a particular case.

10.

This instruction will apply retrospectively to pending appeals and appeals to be filed henceforth in High Courts/Tribunals. Pending appeals below the specified tax limits in para 3 above may be withdrawn/not pressed. Appeals before the Supreme

(3 of 3) [ITA-38/2012]

Court will be governed by the instructions on this subject, operative at the time when such appeal was filed.” The extract of the paragraphs referred to supra, clearly indicates that the limits specified in para 3 may not apply to certain exceptions specified in para 8, at the same time para nos.9 and 10 of the Circular if read conjointly, clearly envisages that the present instructions will apply retrospectively to all the pending appeals and appeals to be filed henceforth in High Courts/Tribunals, subject to exceptions where the tax effect even if is less than Rs.20 lac, can be preferred in High Courts. Taking note of the CBDT Circular dt. 10/12/2015 and the tax effect which indisputably in the instant case is less than Rs.20 lac, much less than what has been prescribed for filing appeals before the High Courts, deserves to be dismissed as not pressed. However, it is made clear that the substantial questions of law raised in the instant appeal, if any, are left open to be examined in an appropriate proceeding, if arises in future. At the same time we consider it appropriate to observe that if the appeal falls in any of the exceptions as referred to in the Circular dt. 10/12/2015, the Revenue will be at liberty to move an application for recalling of the order if so advised. Accordingly, in the light of the CBDT Circular dated 10.12.2015 the appeal stand dismissed as not pressed. (VIRENDRA KUMAR MATHUR),J. (K.S. JHAVERI),J. Mohit Grover/Sr. No.94.

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