INCOME TAX OFFICER 1 (4) vs. SHRI SANDEEP AGRAWAL

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WPT/192/2024HC ChhattisgarhCGHC01036020202423 August 2026Author: HON'BLE SHRI JUSTICE RAKESH MOHAN PANDEY3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the writ petition filed by the Revenue fails and is hereby dismissed. The Court reasoned that the ITAT's order was passed on August 14, 2018, at which time CBDT Circular No. 03/2018 dated July 11, 2018, was in existence. The subsequent CBDT Circular No. 5/2024 dated March 15, 2024, was issued after the ITAT's order. The Court agreed with the respondent's submission that the circular dated March 15, 2024, cannot be given retrospective effect. Therefore, the circular prevailing on the date the ITAT passed its order would govern the situation. The Court found no merit in the Revenue's attempt to rely on a later circular to justify the competence of their appeal before the ITAT.

What were the facts?

The assessee, Shri Sandeep Agrawal, had an assessment order passed against him under Section 143(3) read with Sections 147 & 148 of the Income Tax Act, 1961, on March 18, 2024. The assessee appealed to the CIT(Appeal), which was allowed on November 30, 2015, deleting the additions made by the Assessing Officer. The Revenue then appealed to the Income Tax Appellate Tribunal (ITAT). The ITAT, by order dated August 14, 2018, dismissed the Revenue's appeal, holding that the tax effect was less than Rs. 20,00,000/-, as per CBDT's Circular No. 03/2018 dated July 11, 2018. The Revenue filed a miscellaneous application for rectification of the ITAT's order under Section 254(2) of the Act, which was dismissed by the ITAT on May 28, 2024. The Revenue has now filed a writ petition before the High Court challenging the ITAT's order dated May 28, 2024.

What were the issues?

1. Whether the High Court can quash/set aside the order dated 28.05.2024 passed by the Income Tax Appellate Tribunal under Section 254(2) of the Income Tax Act, 1961. (Question of law and fact) Assessee's Contention (Revenue in this context): The Revenue argues that a subsequent CBDT circular dated March 15, 2024, contains an exception clause for information received from the sales tax department, making the appeal preferred before the ITAT competent. They pray for the petition to be allowed. Revenue's Contention (Assessee in this context): The Respondent (assessee) opposes the petition, arguing that the circular dated March 15, 2024, applies prospectively and cannot be given retrospective effect. They contend that on the date the ITAT passed its order (August 14, 2018), the circular dated July 11, 2018, was prevailing. They submit the petition is misconceived and deserves dismissal.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 148,Section 254(2)

AI-generated summary — verify with the full judgment below

1

CGHC010360202024

2026:CGHC:37793

NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WPT No. 192 of 2024 1 - Income Tax Officer 1 (4) Aayakar Bhawan New Civic Centre Bhilai C.G

... Petitioner versus 1 - Shri Sandeep Agrawal M/s Fuetco And M/s Krishna Iron And Steel Block 13, Plot No.4 Nehru Nagar (East) Bhilai , C.G. Pan- Affpa3365n

... Respondent For Petitioner : Mr. Ajay Kumrani, Advocate For Respondent : Mr. Apurv Goyal, Advocate Hon'ble Shri Justice Rakesh Mohan Pandey Order on Board 24.08

.2026

1.

By way of this petition, the petitioner has sought the following relief(s):- “10.1 That the Hon'ble Court may kindly be pleased to call for the entire records pertaining to the case of the petitioners.

10.

2 That, this Hon'ble Court may kindly be pleased to issue an appropriate writ/order/direction and quash/set aside the impugned order dated 28.05.2024 passed U/s 254 (2) of the Income Tax Act, 1961 by the Income Tax Appellate Tribunal, Raipur Bench, Raipur in Miscellaneous Application No. 22/RPR/2016, A.Y. 2010-11. ARPAN SRIVASTAVA ARPAN SRIVASTAVA Date: 2026.08.25 18:33:02 +0530

2

10.

3 Any other relief/reliefs which the Hon'ble Court may deem fit and proper in the facts and circumstances of the case may also kindly be granted.”

2.

Facts in brief are that an assessment order under Section 143(3) read with Section 147 & 148 of Income Tax Act, 1961 (for short “Act of 1961”) was passed against the assessee on 18.03.2024. The respondent challenged said order by filing an appeal before CIT(Appeal), which was allowed vide order dated 30.11.2015, whereby addition made by the Assessing Officer was deleted.

3.

The department preferred an appeal before the learned Income Tax Appellate Tribunal (ITAT) and the learned Tribunal vide order dated 14.08.2018 held that tax effect involved in the grounds of appeal raised by the department is less than Rs. 20,00,000/- as per CBDT’s Circular No. 03/2018 dated 11.07.2018 and thus dismissed the appeal of the department.

4.

The department moved an application for rectification of order dated 14.08.2018 under Section 254(2) of the Act of 1961, which was dismissed vide order dated 28.05.2024. Against said order this petition has been preferred.

5.

Mr. Ajay Kumrani, Advocate would argue that subsequently CBDT issued a circular dated 15.03.2024 wherein information received from the sales tax department is in exception clause, therefore, the appeal preferred before the learned ITAT was competent. He would pray to allow this petition.

3

6.

On the other hand, Mr. Apurv Goyal, learned counsel appearing for the respondent would oppose. He would submit that circular dated 15.03.2024 would apply prospectively and it cannot be given retrospective effect and on the date of order passed by the learned ITAT, circular dated 11.07.2018 was prevailing. He would submit that the petition is misconceived and deserves to be dismissed.

7.

I have heard learned counsel for the parties and perused the documents placed on record.

8.

Admittedly, the circular No. 5/2024 dated 15.03.2024 was issued after passing of order by the learned ITAT. The circular dated 11.07.2018 was in existence when order was passed by the learned ITAT and the contention made by the Apurv Goyal appears to be just and proper that the circular dated 15.03.2024 cannot be given retrospective effect. Therefore, the circular prevailing on the date on which the learned ITAT passed the order would prevail.

9.

Accordingly, this petition fails and is hereby dismissed.

(Rakesh Mohan Pandey) JUDGE Arpan

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