COMMISSIONER OF INCOME TAX-III vs. BHAGYODAYA GROUP CO OP COTTON SALE GINNING & PRESSING

TAXAP/171/2010 1/3 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL No. 171 of 2010 For Approval and Signature: HONOURABLE MR.JUSTICE V. M. SAHAI Sd/- HONOURABLE MR.JUSTICE N.V. ANJARIA Sd/- ========================================= 1. Whether Reporters of Local Papers may be allowed to see the judgment ? NO 2. To be referred to the Reporter or not ? NO 3. Whether their Lordships wish to see the fair copy of the judgment ? NO 4. Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? NO 5. Whether it is to be circulated to the civil judge ? NO ========================================= COMMISSIONER OF INCOME TAX-III - Appellant Versus BHAGYODAYA GROUP CO OP COTTON SALE GINNING & PRESSING - Opponent ========================================= Appearance : MS PAURAMI B SHETH for Appellant. MRS SWATI SOPARKAR AND MR BANDISH S SOPARKAR for Opponent. ========================================= CORAM : HONOURABLE MR.JUSTICE V. M. SAHAI and HONOURABLE MR.JUSTICE N.V. ANJARIA Date : 31/08/2012 ORAL JUDGMENT

TAXAP/171/2010 2/3 JUDGMENT (Per : HONOURABLE MR.JUSTICE V. M. SAHAI) 1. This Tax Appeal has been admitted on the following substantial question of law :- "Whether the Appellate Tribunal is right in law and on facts in reversing the order passed by CIT (A) and thereby deleting the penalty of Rs.7,18,098/- levied u/s. 271(1)(c) of the Act ?" 2. We have heard Ms. Paurami Sheth, learned Central Government Standing Counsel appearing for the revenue in this Tax Appeal and Mr. Bandish Soparkar, learned counsel appearing for the respondent. 3. In this appeal, the Tribunal has deleted the penalty of Rs.7,18,098/- which is less than Rs.10 Lacs monetary limit fixed by Instruction No.3 of 2011. The tax effect in this Tax Appeal is less than Rs.10 Lacs. 3. A Division Bench of this Court in Tax Appeal No.1404 of 2010 in the case of The Commissioner of Income Tax v. Sureshchandra Durgaprasad Khatod (HUF) decided on 24.8.2012 had held in paragraph 8 as under :- "8. In view of the aforesaid decisions, we find ourselves in agreement with the view taken by the Bombay High Court and Karnataka High Court that Instruction No.3 of 2011 dated 9.2.2011 would also apply to pending Appeals. Tax Appeals below the tax effect of Rs.10 lakhs is not maintainable." 4. In view of the aforesaid decision, we find ourselves in agreement with the view taken by this Court in Tax Appeal No.1404

TAXAP/171/2010 3/3 JUDGMENT of 2010 that Instruction No.3 of 2011 dated 9.2.2011 would also apply to pending Appeals. Tax Appeals below the tax effect of Rs.10 lakhs is not maintainable. 5. For the reasons given above, since in this Appeal the tax effect on the quantum of penalty deleted by the Income Tax Appellate Tribunal is less than Rs.10 lakhs fixed under Instruction No.3 of 2011, therefore, this Tax Appeal filed under section 260A of the Income Tax Act, 1961, is dismissed as not maintainable on the ground of monetary limit, without expressing any opinion on merits of the case, leaving the question open to be decided in an appropriate case. This Tax Appeal is accordingly dismissed. Sd/- [V.M. SAHAI, J.] Sd/- [N. V. ANJARIA, J.] Savariya