C I T vs. NIRMALA PARWAL

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ITA/122/2008HC RajasthanRJHC02030754200707 December 20166 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the appeals should be dismissed as not pressed, taking into account CBDT Circular No. 21/2015 dated December 10, 2015. The circular stipulates a monetary limit of Rs. 20,00,000/- for filing appeals before the High Court. Since the tax effect in the instant case was indisputably less than this prescribed limit, the appeals were deemed to be outside the scope of mandatory appeals. The court clarified that any substantial questions of law raised in the appeals were left open to be examined in future appropriate proceedings. The Revenue was also granted liberty to move an application for recalling the order if the appeal fell under any of the exceptions mentioned in the circular, such as constitutional validity challenges or adverse judgments on Board's orders, notifications, instructions, or circulars, or if the addition related to undisclosed foreign assets/bank accounts.

What were the facts?

The appeals were filed by the Commissioner of Income Tax (CIT) against orders of the Income Tax Appellate Tribunal. The tax effect in these appeals was stated to be less than Rs. 20 lac. The appeals were filed by the Revenue against respondents Nirmala Parwal and Sunita Parwal. The judgment was delivered by the High Court of Judicature for Rajasthan, Bench at Jaipur, on December 7, 2016. The appeals were connected and heard together.

What were the issues?

1. Whether the appeals, having a tax effect less than Rs. 20 lac, should be dismissed in light of CBDT Circular No. 21/2015 dated December 10, 2015, which sets monetary limits for filing appeals by the Revenue. Assessee's Contention: Not recorded in the judgment. Revenue's Contention: Not recorded in the judgment. However, the judgment refers to the tax effect being less than Rs. 20 lac, implying the Revenue's appeals are subject to the monetary limits prescribed by the CBDT circular.

Which sections of the Income-tax Act were involved?

Section 268A

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B.INCOME TAX APPEAL NO. 122 / 2008 C I T ----Appellant Versus NIRMALA PARWAL ----Respondent Connected With D.B.INCOME TAX APPEAL No. 123 / 2008 C I T ----Appellant Versus SUNITA PARWAL ----Respondent D.B.INCOME TAX APPEAL No. 124 / 2008 C I T ----Appellant Versus NIRMALA PARWAL ----Respondent D.B.INCOME TAX APPEAL No. 125 / 2008 C I T ----Appellant Versus SUNITA PARWAL ----Respondent D.B.INCOME TAX APPEAL No. 127 / 2008 C I T (2 of 6 ) [ITA-122/2008] ----Appellant Versus SUNITA PARWAL ----Respondent D.B.INCOME TAX APPEAL No. 128 / 2008 C I T ----Appellant Versus NIRMALA PARWAL ----Respondent D.B.INCOME TAX APPEAL No. 131 / 2008 C I T ----Appellant Versus NIRMALA PARWAL ----Respondent D.B.INCOME TAX APPEAL No. 132 / 2008 C I T ----Appellant Versus NIRMALA PARWAL ----Respondent D.B.INCOME TAX APPEAL No. 133 / 2008 C I T ----Appellant Versus (3 of 6 ) [ITA-122/2008] SUNITA PARWAL ----Respondent D.B.INCOME TAX APPEAL No. 175 / 2008 C I T ----Appellant Versus SUNITA PARWAL ----Respondent D.B.INCOME TAX APPEAL No. 132 / 2009 C I T ----Appellant Versus NIRMALA PARWAL ----Respondent __________________________________________ For Appellant : Mr. R.B. Mathur For Respondents : Mr. N.L. Agarwal __________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE DINESH MEHTA

Judgment 07/12/2016

1.

Instant appeals are 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 (4 of 6 ) [ITA-122/2008] 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 :- 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 (5 of 6 ) [ITA-122/2008] 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 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.

(6 of 6 ) [ITA-122/2008]

5.

Accordingly, in the light of the CBDT Circular dated 10.12.2015 the appeals stand dismissed as not pressed.

6.

Let a copy of this order be placed in each file separately.

(DINESH MEHTA)J. (K.S. JHAVERI)J. Brijesh

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