C I T vs. M/S RISHAB CONST P LTD

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ITA/196/2008HC RajasthanRJHC02041772200708 July 20163 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the appeals filed by the revenue were to be dismissed as not pressed, taking into account CBDT Circular No. 21/2015 and the fact that the tax effect in the instant appeals was less than Rs. 20 lac, which is the monetary limit prescribed for filing appeals before the High Courts. The Court clarified that the substantial questions of law raised in the appeals, if any, are left open to be examined in an appropriate future proceeding. 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. The operative direction was to dismiss the appeals as not pressed.

What were the facts?

These are appeals by the revenue against orders of the Income Tax Appellate Tribunal. The tax effect in both appeals is less than Rs. 20 lac. The Central Board of Direct Taxes (CBDT) issued Circular No. 21/2015 on December 10, 2015, revising monetary limits for filing appeals. The circular states that appeals shall not be filed where the tax effect does not exceed specified monetary limits, including Rs. 20,00,000/- before the High Court. This instruction applies retrospectively to pending appeals. The High Court noted that the tax effect in the instant case is less than the prescribed limit for High Court appeals.

What were the issues?

1. Whether the appeals filed by the revenue are maintainable before the High Court given that the tax effect is less than Rs. 20,00,000/-, as stipulated by CBDT Circular No. 21/2015 for appeals before the High Court. (Question of law) Assessee's Contention: The assessee did not explicitly argue on the merits of the case but implicitly relied on the CBDT Circular to argue that the appeals should not be pressed. The judgment notes the tax effect is less than Rs. 20 lac, which is the limit for High Court appeals as per the circular. Revenue's Contention: The revenue, through its counsel, did not press the appeals. The judgment states the appeals are dismissed as not pressed, implying no active contention was made on the merits of the case by the revenue.

Which sections of the Income-tax Act were involved?

Section 268A

AI-generated summary — verify with the full judgment below

ITA-328/08 ITA-196/08 (1) In The High Court of Judicature for Rajasthan Jaipur Bench, Jaipur

1.

D.B.Income Tax Appeal No.328/2008. 2. D.B.Income Tax Appeal No.196/2008. 08.07.2016. HON'BLE MR.JUSTICE AJAY RASTOGI HON'BLE MR.JUSTICE AJAY RASTOGI HON'BLE MR.JUSTICE J.K. RANKA HON'BLE MR.JUSTICE J.K. RANKA Mr. Tej Prakash Sharma Adv., for appellant-revenue. Mr. P.K. Kasliwal Adv., for respondent-assessee. ***** 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. 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 :- 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/-

ITA-328/08 ITA-196/08 (2) 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.” The extract of the paragraphs referred to supra, clearly indicates that the limits specified in para 3 may not apply to certain exceptions

ITA-328/08 ITA-196/08 (3) 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 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 VS Shekhawat Sr.P.A.

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