COMMISSIONER OF INCOME TAX ALW vs. M/S SHRI SAKUN OIL LTD

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ITA/824/2008HC RajasthanRJHC02005694200802 December 20163 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the appeal filed by the Revenue is to be dismissed as not pressed, taking into account CBDT Circular No. 21/2015. The circular, which applies retrospectively to pending appeals, sets a monetary limit of Rs. 20 lac for filing appeals before the High Courts. Since the tax effect in this case is indisputably less than Rs. 20 lac, the appeal falls within the scope of the circular's directive to withdraw or not press pending appeals below the specified tax limits. The Court clarified that any substantial questions of law raised in the appeal are 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 falls under any of the exceptions mentioned in the circular, such as those relating to constitutional validity or challenging Board's orders. The ratio is that appeals below the prescribed monetary limits in CBDT circulars should generally be dismissed as not pressed, unless they fall under specific exceptions.

What were the facts?

This Indian Income Tax Appellate Tribunal (ITAT) judgment concerns an appeal filed by the Commissioner of Income Tax (Revenue) against M/s Shri Sakun Oil Ltd (Assessee). The appeal challenges an order passed by the ITAT. The tax effect in dispute is stated to be less than Rs. 20 lac. The judgment references CBDT Circular No. 21/2015, dated December 10, 2015, which revised the monetary limits for filing appeals by the Revenue before various appellate authorities, including the High Courts. The circular was issued with the objective of reducing litigation. The present appeal was filed in 2008, prior to the issuance of this circular.

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 lac as per CBDT Circular No. 21/2015. (Question of law) Assessee's Contention: The judgment does not explicitly record any arguments made by the assessee. However, the appeal is being dismissed based on the CBDT circular which sets monetary limits for filing appeals. Revenue's Contention: The judgment does not explicitly record any arguments made by the Revenue. However, the Revenue has filed the present appeal, implying they believe it should be heard on merits. The judgment notes that the tax effect is less than Rs. 20 lac, which is the limit for High Court appeals.

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. 824 / 2008 COMMISSIONER OF INCOME TAX ALW ----Appellant Versus M/S SHRI SAKUN OIL LTD ----Respondent __________________________________________ For Appellant : Mrs. Parinitoo Jain For Respondent: Mr. Anant Kasliwal __________________________________________ HON'BLE MR. JUSTICE K.S.JHAVERI HON'BLE MR. JUSTICE DINESH MEHTA

Judgment Per Hon’ble Mr. Jhaveri, J. 02/12/2016

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 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 :-

(2 of 3 ) [ITA-478/2008] “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 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 of 3 ) [ITA-478/2008] 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 examned 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 is dismissed as not pressed. (DINESH MEHTA)J. (K.S.JHAVERI)J. A.Sharma/69

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