COMMISSIONER OF INCOME TAX vs. OMKAR ENGINEERING CO.

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TAXAP/569/2012HC GujaratGJHC24042972201227 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 was not pressed by the Revenue in view of the low tax effect, considering CBDT Circular No. 17/2019. The Court noted the monetary limits stipulated in the circular, which set a threshold of Rs. 1,00,00,000 for appeals before the High Court. Since the tax effect in this appeal was below this limit, the Revenue chose not to press the appeal. The Court disposed of the appeal accordingly, reserving liberty for the Revenue to revive it in case of any difficulty. The ratio decidendi is that appeals with a low tax effect, as defined by the relevant CBDT circular, may not be pressed by the Revenue, leading to their disposal without a decision on the merits.

What were the facts?

This matter concerns a Tax Appeal filed by the Commissioner of Income Tax (Revenue) against Omkar Engineering Co. (Assessee). The appeal was listed for an appropriate order by the Gujarat High Court. The primary reason for the listing and subsequent disposal was the low tax effect of the appeal. The Court referred to Circular No. 17/2019, dated August 8, 2019, issued by the Central Board of Direct Taxes, which sets monetary limits for filing appeals. The appeal was not pressed by the Revenue in light of this circular and the monetary limits prescribed therein for appeals before the High Court.

What were the issues?

1. Whether the appeal should be entertained given the low tax effect, in light of CBDT Circular No. 17/2019? (Question of law and fact) The Revenue argued that the appeal was not pressed due to the low tax effect, referencing CBDT Circular No. 17/2019. The circular specifies monetary limits for appeals, with appeals before the High Court having a limit of Rs. 1,00,00,000. The Revenue indicated that the tax effect in this appeal fell below this threshold. No specific arguments were recorded for the Assessee regarding the merits of the appeal, as the appeal was not pressed by the Revenue.

AI-generated summary — verify with the full judgment below

C/TAXAP/569/2012 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 569 of 2012 ========================================================== COMMISSIONER OF INCOME TAX Versus OMKAR ENGINEERING CO. ========================================================== Appearance: MRS MAUNA M BHATT(174) for the Appellant(s) No. 1 MR TUSHAR P HEMANI(2790) for the Opponent(s) No. 1 MS VAIBHAVI K PARIKH(3238) 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 Page 1 of 2

C/TAXAP/569/2012 ORDER referred to above, the table for monetary limits is as follows: 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

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) Vahid Page 2 of 2

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