C I T JAIPUR vs. MAHESH CHAND GUPTA

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ITA/164/2015HC RajasthanRJHC02060415201509 May 20164 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the appeal filed by the Revenue was to be dismissed as not pressed, primarily due to the tax effect being less than Rs. 20 lac, which fell below the monetary limit prescribed for filing appeals before the High Court as per CBDT Circular No. 21/2015 dated 10.12.2015. The Court clarified that the substantial questions of law, if any, raised in the appeal were left open for examination in future appropriate proceedings. The Revenue was granted liberty to move an application for recalling the order if the appeal fell under any of the exceptions mentioned in the circular. The operative direction was to dismiss the appeal as not pressed.

What were the facts?

The Principal Commissioner of Income Tax (Revenue) filed an appeal before the Rajasthan High Court at Jaipur against an order of the Income Tax Appellate Tribunal (ITAT). The appeal concerned Assessment Year(s) not specified. The tax effect in dispute was stated to be less than Rs. 20 lac. The Revenue relied on Circular No. 21/2015 issued by the Central Board of Direct Taxes (CBDT) dated 10.12.2015, which stipulated monetary limits for filing appeals. The High Court noted that the tax effect was below the prescribed limit for High Court appeals.

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 per CBDT Circular No. 21/2015. Assessee's Contentions: The judgment does not record any specific contentions from the assessee, Mahesh Chand Gupta. The appeal was dismissed based on the Revenue's reliance on the CBDT circular. Revenue's Contentions: The Revenue contended that the appeal was maintainable despite the tax effect being less than Rs. 20 lac, implicitly arguing for an exception or that the circular did not preclude this appeal. However, the court's decision was based on the application of the circular's monetary limits.

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
1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JAIPUR BENCH JAIPUR D.B. Income Tax Appeal No.164/2015 Pr. Commissioner of Income Tax Vs. Mahesh Chand Gupta Date of Order ::: 09.05.2016 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/62 All corrections made in the judgment/order have been incorporated in the judgment/order being e-mailed. Sunita Kanwar Jr.P.A.

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