THE PRINCIPAL COMMISSIONER OF INCOME TAX 3 vs. M/S NIRMA INDUSTRIES PVT LTD

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TAXAP/122/2019HC GujaratGJHC24019540201927 January 2020Bench: HONOURABLE MR. JUSTICE J.B.PARDIWALA,HONOURABLE MR. JUSTICE BHARGAV D. KARIA2 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court held that the Tax Appeal was not pressed by the Revenue due to the low tax effect, in accordance with Circular No. 17/2019 dated August 8, 2019. The Court noted the monetary limits stipulated in the circular, specifically that appeals before the High Court are subject to a limit of Rs. 1,00,00,000. Based on this, the Court disposed of the appeal. The principle derived is that appeals with a low tax effect, falling below the limits prescribed by CBDT circulars, may not be pursued. The Revenue was granted liberty to revive the Tax Appeal in case of any difficulty. No specific issue was left undecided; the appeal was disposed of on procedural grounds.

What were the facts?

This matter concerns a Tax Appeal filed by the Principal Commissioner of Income Tax 3 (the Revenue) against M/s. Nirma Industries Pvt. Ltd. (the assessee). The appeal was listed for an appropriate order by the Registry due to its low tax effect. The appeal was to be disposed of in accordance with Circular No. 17/2019, dated August 8, 2019, issued by the Central Board of Direct Taxes. The circular outlines revised monetary limits for filing appeals. The Revenue stated that the appeal was not pressed due to the low tax effect, referencing the aforementioned circular.

What were the issues?

1. Whether the Tax Appeal should be dismissed on the grounds of low tax effect, as per Circular No. 17/2019? (Question of law) Assessee's Contentions: The assessee did not file any specific contentions in the provided text. However, the appeal was not pressed by the Revenue. Revenue's Contentions: The Revenue contended that the Tax Appeal was not pressed in view of the low tax effect, citing Circular No. 17/2019, dated August 8, 2019. This circular establishes monetary limits for appeals, with appeals before the High Court having a limit of Rs. 1,00,00,000. The Revenue implicitly argued that the tax effect in this appeal fell below the prescribed threshold, justifying its withdrawal.

AI-generated summary — verify with the full judgment below

C/TAXAP/122/2019                                                                                                 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO.  122 of 2019 ========================================================== THE PRINCIPAL COMMISSIONER OF INCOME TAX 3 Versus M/S NIRMA INDUSTRIES PVT LTD ========================================================== Appearance: MRS MAUNA M BHATT(174) for the Appellant(s) No. 1 MR B S SOPARKAR(6851) for the Opponent(s) No. 1 ========================================================== CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA and HONOURABLE MR. JUSTICE BHARGAV D. KARIA

Date : 27/01/2020

ORAL ORDER (PER : HONOURABLE MR.JUSTICE J.B.PARDIWALA) The Registry has notified the Appeal for the purpose of passing an appropriate order. The captioned Appeal has been notified because of the low tax effect. The Appeal is to be disposed of keeping in mind the Circular No.17/2019, dated 8th August 2019, issued by the Government of India, Ministry of Finance, Department of Revenue, Central Board of Direct Taxes, New Delhi. This Tax Appeal is not pressed in view of the low tax effect having regard to the Circular No.17/2019, dated 8th August 2019, issued by the Government of India, Ministry of Finance, Department of Revenue, Central Board of Direct Taxes, New Delhi. Page  1 of  2

C/TAXAP/122/2019                                                                                                 ORDER According to the new policy, as reflected from the Circular referred to above, the table for monetary limits is as follows : Sr. No. Appeals/SLPs in Income-tax matters Monetary Limits (Rs.) 1 Before Appellate Tribunal 50,00,000 2 Before High Court 1,00,00,000 3 Before Supreme Court 2,00,00,000 In view of the aforesaid, the Appeal is disposed of accordingly. In case of any difficulty, we reserve the liberty for the Revenue to revive the Tax Appeal. (J. B. PARDIWALA, J.) (BHARGAV D. KARIA, J.) /MOINUDDIN Page  2 of  2

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