C I T JAIPUR vs. PRAKASH CHAND DHADDA

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ITA/371/2008HC RajasthanRJHC02038115200816 March 20163 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the instant appeals, with a tax effect indisputably less than Rs. 20 lac (which is the prescribed limit for filing appeals before the High Courts), deserve to be dismissed as not pressed, in light of CBDT Circular dated 10.12.2015. The Court clarified that the substantial questions of law raised in the appeals, if any, are left open to be examined in future appropriate proceedings. Furthermore, the Court observed that if an appeal falls within any of the exceptions mentioned in the circular, the Revenue would be at liberty to move an application for recalling the order. Consequently, the appeals were dismissed as not pressed.

What were the facts?

The Income Tax Appellate Tribunal (ITAT) has issued multiple orders in various appeals filed by the Revenue. The present appeals are directed against these ITAT orders. The tax effect in these appeals is stated to be less than Rs. 20 lac. The Central Board of Direct Taxes (CBDT) issued Circular No. 21/2015 on 10.12.2015, superseding earlier instructions, to regularize monetary limits for filing appeals by the Revenue before various judicial forums, including High Courts and the Supreme Court, with the objective of reducing litigation. The circular specifies monetary limits for filing appeals, with Rs. 20,00,000/- being the limit for appeals before the High Court. The circular also provides for exceptions where appeals should be contested on merits irrespective of the tax effect.

What were the issues?

1. Whether the appeals filed by the Revenue before the High Court are 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. Assessee's Contention: The assessee would likely argue that the appeals are not maintainable as the tax effect is below the prescribed limit and no exceptions mentioned in the circular apply. The judgment does not explicitly record the assessee's arguments but implies their stance through the court's reasoning. Revenue's Contention: The Revenue would contend that the appeals should be considered on merits, possibly arguing that the case falls under one of the exceptions or that the circular should be applied retrospectively to pending appeals, allowing withdrawal or dismissal as not pressed if the tax effect is below the limit. The judgment notes the tax effect is less than Rs. 20 lac, suggesting the Revenue did not press the appeals on merits.

Which sections of the Income-tax Act were involved?

Section 268A,Section 12A

AI-generated summary — verify with the full judgment below

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1.

D.B.Income Tax Appeal No.82/2002. 2. D.B.Income Tax Appeal No.153/2005. 3. D.B.Income Tax Appeal No.172/2005. 4. D.B.Income Tax Appeal No.38/2008. 5. D.B.Income Tax Appeal No.120/2008. 6. D.B.Income Tax Appeal No.249/2008. 7. D.B.Income Tax Appeal No.364/2008. 8. D.B.Income Tax Appeal No.371/2008. 9. D.B.Income Tax Appeal No.600/2008. 10. D.B.Income Tax Appeal No.749/2008. 11. D.B.Income Tax Appeal No.9/2009. 12. D.B.Income Tax Appeal No.63/2009. 13. D.B.Income Tax Appeal No.263/2009. 14. D.B.Income Tax Appeal No.295/2009. 15. D.B.Income Tax Appeal No.312/2009. 16. D.B.Income Tax Appeal No.451/2009. 16.03.2016. HON'BLE MR.JUSTICE AJAY RASTOGI HON'BLE MR.JUSTICE AJAY RASTOGI HON'BLE MR.JUSTICE PRAKASH GUPTA HON'BLE MR.JUSTICE PRAKASH GUPTA Mr.R.B.Mathur ] Mr.Sameer Jain ] Mr.Anuroop Singhi ] Mrs.Parinitoo Jain ] Counsel for appellants. Mr.Anil Mehta ] Mr.M.Iqbal ] Mr.R.K.Yadav ] Mr.N.K.Baid ] Mr.Siddharth Ranka ] Mr.S.P.Goyal ] Mr.N.K.Jain ]Counsel for respondents. ***** Instant appeals are 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 :-

-2- “3. Henceforth, appeals/SLPs shall not be filed in cases where the tax effect does not exceed the monetary limits given hereunder :- 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 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

-3- 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 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 appeals stand dismissed as not pressed. Let a copy of this order be placed in each file separately. (PRAKASH GUPTA),J.

(AJAY RASTOGI),J. All corrections made in judgment/order have been All corrections made in judgment/order have been incorporated in the judgment/order being emailed. incorporated in the judgment/order being emailed. Solanki DS, P.S. Solanki DS, P.S.

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