C I T JAIPUR vs. HI CHOICE EXPORTS PV T LTD

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ITA/32/2009HC RajasthanRJHC02022533200802 December 20164 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the appeal filed by the Revenue deserved to be dismissed as not pressed. The reasoning was based on CBDT Circular No. 21/2015, which sets monetary limits for filing appeals. The tax effect in this case was less than Rs. 20 lac, which is the limit for appeals before the High Court. The Court noted that while the circular has exceptions (mentioned in para 8), the present case did not appear to fall under them, and the general rule of monetary limit applied. The ratio decidendi is that appeals with a tax effect below the prescribed monetary limits in CBDT circulars should generally be dismissed as not pressed, unless they fall under specific exceptions. The Court explicitly stated that substantial questions of law raised in the appeal, if any, are left open to be examined in an appropriate future proceeding. The operative direction is that the appeal is dismissed as not pressed. Liberty is granted to the Revenue to move an application for recalling the order if the appeal falls under any of the exceptions mentioned in the Circular.

What were the facts?

This Indian ITAT judgment concerns an appeal filed by the CIT Jaipur (the Revenue) against an order of the Income Tax Appellate Tribunal (ITAT) pertaining to Hi Choice Exports Pvt Ltd (the Assessee). The assessment year(s) are not explicitly stated. The appeal challenges the ITAT's order. The tax effect in dispute is stated to be less than Rs. 20 lac. The judgment primarily discusses a CBDT Circular No. 21/2015 dated 10.12.2015, which revised monetary limits for filing appeals by the Revenue. The circular aims to reduce litigation. The High Court notes that the instant appeal's tax effect is below the prescribed limit for High Court appeals.

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 Rs. 20 lac, as per CBDT Circular No. 21/2015? (Question of law) The Revenue contended that the appeal should be dismissed as not pressed due to the tax effect being below the prescribed monetary limit in CBDT Circular No. 21/2015. The Assessee did not present any arguments as recorded in the judgment. The High Court considered the applicability of the CBDT Circular and its exceptions.

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. 32 / 2009 C I T JAIPUR ----Appellant Versus HI CHOICE EXPORTS PV T LTD ----Respondent __________________________________________ For Appellant : Mr. Anuroop Singhi For Respondent : Mr. Sanjay Jhanwar __________________________________________ 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 4 ) [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 4 ) [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. Liberty to revive in case of difficulty.

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

(4 of 4 ) [ITA-478/2008]

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