COMMISSIONER OF INCOME TAX JAI vs. M/S MADHURAM INTERNATIONAL JAI

PDF · subscribers
ITA/469/2008HC RajasthanRJHC02038321200827 January 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, deserved to be dismissed as not pressed, in light of CBDT Circular No. 21/2015. The court noted that the circular, issued under Section 268A(1) of the Income-tax Act, 1961, aimed to reduce litigation by setting monetary limits for filing appeals. While the circular provided exceptions for certain types of cases (e.g., constitutional validity challenges, adverse judgments on Board's orders, undisclosed foreign assets), the present appeal did not fall under these exceptions. The court clarified that the substantial questions of law raised in the appeal, if any, were left open to be examined in future appropriate proceedings. The Revenue was granted liberty to move an application for recalling the order if the appeal fell within the exceptions mentioned in the circular. Consequently, the appeal was dismissed as not pressed.

What were the facts?

The appeal was filed by the Commissioner of Income Tax, Jaipur-II against an order of the Income Tax Appellate Tribunal. The tax effect in the present case was stated to be less than Rs. 20 lac. The Central Board of Direct Taxes (CBDT) had issued Circular No. 21/2015 on December 10, 2015, in exercise of its powers under Section 268A(1) of the Income-tax Act, 1961, to regularize monetary limits for filing appeals by the Revenue. This circular aimed at reducing litigation. The circular stipulated monetary limits for filing appeals before the Appellate Tribunal, High Courts, and the Supreme Court. It also provided for exceptions where appeals could be contested on merits despite a lower tax effect.

What were the issues?

1. Whether the appeal filed by the Revenue is maintainable before the High Court given that the tax effect is less than the prescribed monetary limit of Rs. 20 lac for High Court appeals, as per CBDT Circular No. 21/2015. Assessee's contentions: The judgment does not record any specific contentions made by the assessee. The appeal was dismissed based on the CBDT circular and the tax effect. Revenue's contentions: The judgment does not explicitly record the revenue's contentions. However, the appeal was filed by the Revenue, implying they sought to pursue the matter despite the tax effect being below the prescribed limit. The court's decision was based on the applicability of the CBDT circular.

Which sections of the Income-tax Act were involved?

Section 268A(1)

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. 469 / 2008 Commissioner Of Income Tax Jaipur-II, Jaipur. ----Appellant Versus M/S Madhuram International, 14-B, Govind Marg, Adarsh Nagar, Jaipur. ----Respondent _____________________________________________________ For Appellant(s) : Mr. K.D. Mathur on behalf of Mr. R.B. Mathur For Respondent(s) : Mr. Sanjay Jhanwar _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE VINIT KUMAR MATHUR

Judgment Per Hon’ble Jhaveri J. 27/01/2017 1. 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.

2.

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 appeals 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-469/2008] 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 Court will be governed by the instructions

(3 of 3) [ITA-469/2008] on this subject, operative at the time when such appeal was filed.”

3.

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.

4.

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 appeal 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 appeals, 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.

5.

Accordingly, in the light of the CBDT Circular dated 10.12.2015 the appeal stands dismissed as not pressed.

6.

However, the parties shall be at liberty to revive the appeal in case of difficulty. (VINIT KUMAR MATHUR)J. (K.S. JHAVERI)J. bblm/109

More judgments on Section 268A(1)

All 190 judgments and leading authorities on Section 268A(1) →

Recent GST High Court judgments

Search GST case law →