C I T ALWAR vs. M/S NARENDRA SINGH HARI SINGH and PARTY

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ITA/173/2014HC RajasthanRJHC02072955201421 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, deserved to be dismissed as not pressed, in light of CBDT Circular dated 10.12.2015. The Court reasoned that the circular, particularly paragraphs 9 and 10, envisages that the instructions apply retrospectively to pending appeals and appeals to be filed henceforth, subject to exceptions. The monetary limits specified in paragraph 3 of the circular, which sets Rs. 20,00,000/- as the limit for appeals before the High Court, were deemed applicable. 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. It was also observed that if the appeal fell under any of the exceptions mentioned in the circular (para 8), the Revenue would be at liberty to move an application for recalling the order. Consequently, 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 M/s. Narendra Singh Hari Singh & Party. The appeal was filed for assessment year(s) not specified. The primary issue revolves around the monetary limit for filing appeals by the Revenue before the High Court. The tax effect in the present case was stated to be less than Rs. 20 lac. The High Court noted a CBDT Circular No. 21/2015 dated 10.12.2015, which revised monetary limits for filing appeals to reduce litigation. The circular stipulated a monetary limit of Rs. 20,00,000/- for appeals before the High Court.

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 the prescribed monetary limit of Rs. 20,00,000/- as per CBDT Circular No. 21/2015. The assessee's contentions are not recorded in the judgment. The revenue's contention, implied by the filing of the appeal, is that the appeal should be heard on merits. However, the judgment focuses on the applicability of the CBDT circular. The revenue relied on CBDT Circular No. 21/2015 dated 10.12.2015, which supersedes earlier instructions and sets monetary limits for filing appeals. The circular, in paragraph 10, states that pending appeals below the specified tax limits may be withdrawn/not pressed. The revenue also implicitly relies on the exceptions mentioned in paragraph 8 of the circular, which allow appeals to be contested on merits notwithstanding lower tax effect, such as where the Constitutional validity of provisions is challenged, or Board's orders are held illegal.

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.173/2014 CIT, Alwar Vs. M/s. Narendra Singh Hari Singh & Party Date of Order ::: 21.04.2016 HON'BLE MR. JUSTICE M.N. BHANDARI HON'BLE MR. JUSTICE VIJAY KUMAR VYAS Mrs. Parinitoo Jain, 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 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. (VIJAY KUMAR VYAS),J (M.N. BHANDARI),J sunita/42 All corrections made in the judgment/order have been incorporated in the judgment/order being emailed. Sunita Kanwar Jr.P.A.

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