PRINCIPAL COMMISSIONER OF INCOME TAX - 1 vs. WOCO MOTHERSON ADVANCED RUBBER TECHNOLOGIES LIMITED

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TAXAP/127/2017HC GujaratGJHC24056800201707 January 2022Bench: HONOURABLE MR. JUSTICE J.B.PARDIWALA,HONOURABLE MS. JUSTICE NISHA M. THAKORE2 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court held that the appeal was not pressed by the Revenue in view of the low tax effect, as per Circular No. 17/2019. The Court noted the monetary limit for appeals before the High Court is Rs. 1,00,00,000. Consequently, the appeal was disposed of in accordance with this policy. The reasoning is based on the Revenue's decision not to pursue the appeal due to its low tax effect, aligning with the CBDT's instructions to avoid litigation on such matters. The ratio decidendi is that appeals with a low tax effect, as defined by the relevant circular, are to be withdrawn or not pressed. The operative direction was to dispose of the appeal accordingly. Liberty was reserved for the Revenue to revive the tax appeal in case of any difficulty.

What were the facts?

The Principal Commissioner of Income Tax - 1 (Revenue) filed a Tax Appeal before the High Court of Gujarat at Ahmedabad against Woco Motherson Advanced Rubber Technologies Limited (Assessee). The appeal was notified for passing an appropriate order due to low tax effect. The Revenue stated that the appeal was not pressed in view of the low tax effect, referencing Circular No. 17/2019 dated August 8, 2019, issued by the Central Board of Direct Taxes. This circular outlines monetary limits for filing appeals. The High Court noted the monetary limit for appeals before the High Court is Rs. 1,00,00,000. The appeal was disposed of accordingly, with liberty reserved for the Revenue to revive it in case of difficulty.

What were the issues?

1. Whether the appeal should be dismissed on the grounds of low tax effect, as per Circular No. 17/2019? (Question of law) Assessee's Contention: The assessee did not explicitly present arguments in the judgment. However, the appeal was filed by the Revenue, and the judgment indicates the appeal was not pressed by the Revenue. Revenue's Contention: The Revenue argued that the appeal should be disposed of due to low tax effect, citing Circular No. 17/2019. This circular sets monetary limits for appeals, and the appeal in question falls below the threshold for High Court appeals.

AI-generated summary — verify with the full judgment below

C/TAXAP/127/2017 ORDER DATED: 07/01/2022 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 127 of 2017 ========================================================== PRINCIPAL COMMISSIONER OF INCOME TAX - 1 Versus WOCO MOTHERSON ADVANCED RUBBER TECHNOLOGIES LIMITED ========================================================== Appearance: MR MANISH R. BHATT, SENIOR ADVOCATE FOR M R BHATT & CO. (5953) for the Appellant(s) No. 1 RULE SERVED(64) for the Opponent(s) No. 1 ========================================================== CORAM: HONOURABLE MR. JUSTICE J.B.PARDIWALA and HONOURABLE MS. JUSTICE NISHA M. THAKORE

Date : 07/01/2022

ORAL ORDER (PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA) 1. 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 8 th August, 2019 issued by the Government of India, Ministry of Finance, Department of Revenue, Central Board Direct Taxes, New Delhi. 2. This tax appeal is not pressed in view of the low tax effect having regard to the Circular No.17/2019, dated 8 th August, 2019 issued by the Government of India, Ministry of Finance, Department of Revenue, Central Board Direct Taxes, New Delhi. 3. According to the new policy as reflected from the Circular referred to above, the table for monetary limits is as follows:- Page 1 of 2

C/TAXAP/127/2017 ORDER DATED: 07/01/2022 Sr. No. Appeals/SLPs in Income-tax matters Monetary Limit (Rs.) 1 Before Appellate Tribunal 50,00,000 2 Before High Court 1,00,00,000 3 Before Supreme Court 2,00,00,000 4. 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) (NISHA M. THAKORE,J) A. B. VAGHELA Page 2 of 2

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