COMMISSIONER OF INCOME TAX JAIPUR vs. SMT MANBHAR DEVI MEENA

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ITA/24/2015HC RajasthanRJHC02083023201504 May 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, taking into account CBDT Circular No. 21/2015 and the fact that the tax effect in the instant case was less than Rs. 20 lac, which is the prescribed limit for filing appeals before the High Courts. The Court clarified that the substantial questions of law raised in the appeal, if any, were left open to be examined in an appropriate proceeding in the future. The Revenue was also granted liberty to move an application for recalling the order if the appeal fell under any of the exceptions mentioned in the CBDT circular. The operative direction was that the appeal stands dismissed as not pressed.

What were the facts?

The Commissioner of Income Tax (Revenue) filed an appeal before the Rajasthan High Court against an order of the Income Tax Appellate Tribunal. The assessee is Smt. Manbhar Devi Meena. The tax effect in the present case was stated to be less than Rs. 20 lac. The High Court noted a Circular No. 21/2015 issued by the Central Board of Direct Taxes (CBDT) dated December 10, 2015, which revised the monetary limits for filing appeals by the Revenue. The circular aimed to reduce litigation and specified monetary limits for appeals before the Appellate Tribunal, High Courts, and the Supreme Court. The circular also provided exceptions where appeals could be filed irrespective of the 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 for filing appeals before High Courts? The Revenue contended that the appeal was filed against an order of the Income Tax Appellate Tribunal. The tax effect was less than Rs. 20 lac. The Revenue relied on CBDT Circular No. 21/2015, which sets a monetary limit of Rs. 20 lac for filing appeals before the High Court. The Revenue also noted that the circular applies retrospectively to pending appeals. The Revenue did not argue for any exceptions to the monetary limit.

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.24/2015 Commissioner of Income Tax Vs. Smt. Manbhar Devi Meena Date of Order ::: 04.05.2016 HON'BLE MR. JUSTICE M.N. BHANDARI HON'BLE MR. JUSTICE J.K. RANKA Mr. RB Mathur, for the appellant.

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 3 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 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 4 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/46 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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