PRINCIPAL COMMISSIONER OF INCOME TAX 1, vs. DOSHION LTD

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TAXAP/381/2018HC GujaratGJHC24011197201827 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 appeal should be disposed of in view of the low tax effect, as per Circular No. 17/2019. The reasoning was based on the policy outlined in the circular, which sets monetary limits for appeals. Since the tax effect in this case was below the threshold of Rs. 1,00,00,000 for appeals before the High Court, the Revenue chose not to press the appeal. The ratio decidendi is that appeals with a low tax effect, as defined by the CBDT circulars, may not be pursued by the Revenue. The operative direction was to dispose of the appeal accordingly, with liberty 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 Doshion Ltd (Assessee). The appeal was notified for an appropriate order due to low tax effect. The Revenue decided not to press the appeal in light of Circular No. 17/2019, dated August 8, 2019, issued by the Central Board of Direct Taxes, which sets monetary limits for filing appeals. The circular specifies a monetary limit of Rs. 1,00,00,000 for appeals before the High Court. The High Court noted that the appeal was disposed of accordingly, reserving liberty 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) The Revenue argued that the appeal was not pressed due to the low tax effect, citing Circular No. 17/2019. The circular establishes monetary limits for appeals, with Rs. 1,00,00,000 being the limit for appeals before the High Court. The Revenue relied on this circular to justify not pursuing the appeal. The judgment does not record any specific arguments from the Assessee on this issue.

AI-generated summary — verify with the full judgment below

C/TAXAP/381/2018 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 381 of 2018 ========================================================== PRINCIPAL COMMISSIONER OF INCOME TAX 1, Versus DOSHION LTD ========================================================== Appearance: MRS MAUNA M BHATT(174) for the Appellant(s) No. 1 MR TEJ SHAH(5743) 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) 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 8th 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 8th 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/381/2018 ORDER Sr. No. Appeals/SLPs in Incometax 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) (BHARGAV D. KARIA, J) KUMAR ALOK Page 2 of 2

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