C I T vs. M/S GHISA LAL BUDDHA LAL

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ITR/1/2015HC RajasthanRJHC02052389201512 April 20164 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the instant reference, with a tax effect indisputably less than Rs. 20 lac (the monetary limit prescribed for filing appeals before the High Court), deserves to be dismissed as not pressed. The court relied on CBDT Circular No. 21/2015, which aims to reduce litigation by setting monetary limits for appeals. While acknowledging that substantial questions of law were raised, the court stated these were left open to be examined in an appropriate future proceeding. The court also clarified that if the reference fell under any exceptions mentioned in the circular (e.g., constitutional validity, Board's order held illegal, revenue audit objection accepted, or undisclosed foreign assets/bank accounts), the Revenue would be at liberty to move an application for recalling the order. The operative direction was to dismiss the reference as not pressed.

What were the facts?

This is an Income Tax Reference No. 1/2015 before the Rajasthan High Court at Jaipur Bench. The reference was directed by the Income Tax Appellate Tribunal. The assessee is M/s. Ghisalal Buddhalal Bansur, Alwar, and the revenue is CIT, Jodhpur. The tax effect in the case is stated to be less than Rs. 20 lac. The High Court noted that no one was present for either party. The court considered Circular No. 21/2015 issued by the CBDT on December 10, 2015, which revised monetary limits for filing appeals to reduce litigation.

What were the issues?

1. Whether the present reference, with a tax effect less than Rs. 20 lac, should be dismissed in light of CBDT Circular No. 21/2015, which sets a monetary limit of Rs. 20 lac for appeals before the High Court? (Question of law) The revenue's contention, implied by the reference and the court's consideration of the circular, is that the appeal should be governed by the monetary limits prescribed. The assessee's arguments are not recorded as none were present. The court, however, considered the applicability of the CBDT Circular No. 21/2015 and its exceptions.

Which sections of the Income-tax Act were involved?

Section 268A

AI-generated summary — verify with the full judgment below

1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JAIPUR BENCH JAIPUR D.B. Income Tax Reference No.1/2015 CIT, Jodhpur Vs. M/s. Ghisalal Buddhalal Bansur, Alwar Date of Order ::: 12.04.2016

HON'BLE MR. JUSTICE

M.N. BHANDARI

HON'BLE MR. JUSTICE VIJAY KUMAR VYAS None present. Instant reference is directed by 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 powers 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 to reduce 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 reference is 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 reference 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 reference stands dismissed as not pressed. (VIJAY KUMAR VYAS),J (M.N. BHANDARI),J sunita/91 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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