PRINCIPAL COMMISSIONER OF INCOME TAX 2, vs. MILESTONE TRADELINKS P LTD

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TAXAP/585/2016HC GujaratGJHC24051854201627 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 is 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 to withdraw its appeal due to the low tax effect, aligning with the CBDT's instructions to avoid litigation in such cases. The ratio decidendi is that appeals with a low tax effect, as defined by the prevailing circulars, may be withdrawn or not pressed by the Revenue. The operative direction is the disposal of the appeal. 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 2 (Revenue) filed a Tax Appeal before the High Court of Gujarat at Ahmedabad against an order concerning Milestone Tradelinks P 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. 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 Tax Appeal should be dismissed on the grounds of low tax effect, as per Circular No. 17/2019? Assessee's Contention: The Assessee did not explicitly present arguments as the appeal was not pressed by the Revenue. However, the appeal's disposal is based on the Revenue's decision to not press it due to low tax effect. Revenue's Contention: The Revenue argued that the appeal should be disposed of in view of the low tax effect, citing Circular No. 17/2019. The circular establishes monetary limits for appeals, and the present appeal falls below the threshold for appeals before the High Court, which is Rs. 1,00,00,000. The Revenue relied on the policy reflected in Circular No. 17/2019.

AI-generated summary — verify with the full judgment below

C/TAXAP/585/2016 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 585 of 2016 ========================================================== PRINCIPAL COMMISSIONER OF INCOME TAX 2, Versus MILESTONE TRADELINKS P LTD ========================================================== Appearance: MRS MAUNA M BHATT(174) for the Appellant(s) No. 1 MR VIJAY S RANJAN(6126) for the Opponent(s) No. 1 RULE UNSERVED(68) 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. Page 1 of 2

C/TAXAP/585/2016 ORDER 3. 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 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) GIRISH Page 2 of 2

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