C I T ALWAR vs. HAZARI LAL

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ITA/70/2014HC RajasthanRJHC02041708201425 April 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, deserves to be dismissed as not pressed, in light of CBDT Circular dated 10.12.2015. The Court reasoned that the circular specifies monetary limits for filing appeals before the High Court, and this appeal falls below that limit. The Court clarified that substantial questions of law raised in the appeal, if any, are left open to be examined in an appropriate proceeding in the future. It was also observed that if the appeal falls under any of the exceptions mentioned 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 is at liberty to move an application for recalling the order. Accordingly, the appeal was dismissed as not pressed.

What were the facts?

This Indian ITAT judgment concerns an appeal filed by the Commissioner of Income Tax (CIT), Alwar, against an order of the Income Tax Appellate Tribunal (ITAT) in the case of Hazari Lal. The assessment year(s) are not explicitly stated. The appeal is before the High Court of Judicature for Rajasthan at Jaipur Bench. The tax effect in dispute is less than Rs. 20 lac. The appeal is being decided in light of a Circular No. 21/2015 issued by the Central Board of Direct Taxes (CBDT) dated 10.12.2015, which regularizes monetary limits for filing appeals by the Revenue. The High Court notes that pending appeals below the specified tax limits may be withdrawn or not pressed.

What were the issues?

1. Whether the appeal filed by the Revenue is maintainable before the High Court given the tax effect is less than Rs. 20 lac, as per CBDT Circular No. 21/2015? (Question of law, concerning the applicability of CBDT Circular No. 21/2015 and Section 268A of the Income-tax Act, 1961). Assessee's Contention: The judgment does not record any specific contentions from the assessee, Hazari Lal. Revenue's Contention: The Revenue has filed the appeal, but the judgment focuses on the applicability of the CBDT circular regarding monetary limits for filing appeals. The Revenue's argument, if any, regarding the merits of the case or exceptions to the circular is not explicitly detailed.

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.70/2014 CIT, Alwar Vs. Hazari Lal Date of Order ::: 25.04.2016 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 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 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/38 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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