PRINCIPAL COMMISSIONER OF INCOME TAX KOT vs. M/S G B IMPEX

PDF · subscribers
ITA/41/2015HC RajasthanRJHC02052655201510 May 20164 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 (which is the prescribed limit for filing appeals before the High Courts as per CBDT Circular No. 21/2015), deserves to be dismissed as not pressed. The Court acknowledged that the circular applies retrospectively to pending appeals. It clarified that the substantial questions of law raised in the appeal, if any, are left open to be examined in an appropriate proceeding in the future. The Court also noted that if the appeal falls within any of the exceptions specified in the circular (e.g., constitutional validity, Board's order held illegal, revenue audit objection accepted, or addition relating to undisclosed foreign assets/bank accounts), the Revenue would be at liberty to move an application for recalling the order. Consequently, the appeal was dismissed as not pressed in light of the CBDT Circular dated 10.12.2015.

What were the facts?

The appeal was filed by the Commissioner of Income Tax (Revenue) against an order of the Income Tax Appellate Tribunal (ITAT). The tax effect in the present case was stated to be less than Rs. 20 lac. The High Court noted that a Circular No. 21/2015 dated 10.12.2015 was issued by the Central Board of Direct Taxes (CBDT) in exercise of its power under Section 268A(1) of the Income-tax Act, 1961, to regularize monetary limits for filing appeals. This circular aimed to reduce litigation. The Court referred to specific paragraphs of the circular concerning monetary limits for appeals before the Tribunal, High Courts, and Supreme Court, and exceptions where appeals could be filed irrespective of tax effect.

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 Rs. 20 lac, as stipulated by CBDT Circular No. 21/2015. Assessee's Contention: The judgment does not record any specific contentions made by the assessee. However, the entire appeal is being considered in light of the CBDT Circular. Revenue's Contention: The Revenue filed the appeal, implying they believed it was maintainable. The judgment, however, focuses on the applicability of the CBDT Circular to the pending appeal. The Revenue's argument, if any, is not explicitly detailed, but the Court's decision hinges on the circular's provisions regarding tax effect and the withdrawal of pending appeals below specified limits.

Which sections of the Income-tax Act were involved?

Section 268A(1),Section 12A

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JAIPUR BENCH JAIPUR D.B. Income Tax Appeal No.41/2015 Commissioner of Income Tax Vs. M/s. G.B. Impex Date of Order ::: 10.05.2016 HON'BLE MR. JUSTICE M.N. BHANDARI HON'BLE MR. JUSTICE J.K. RANKA Mr. Nikhil Simlote, for the appellant(s).

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 :- “3. Henceforth, appeals/SLPs shall not be filed in cases where the tax effect does not exceed the monetary limits given hereunder :-

2 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 3 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 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

4 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. Accordingly, in the light of the CBDT Circular dated 10.12.2015 the appeal stand dismissed as not pressed. (J.K. RANKA),J (M.N.BHANDARI),J sunita/18 All corrections made in the judgment/order have been incorporated in the judgment/order being e-mailed. Sunita Kanwar Jr.P.A.

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 →