PRINCIPAL COMMISSIONER OF INCOME TAX 1 vs. ATUL LIMITED

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TAXAP/822/2018HC GujaratGJHC24011188201807 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 disposed of the appeal accordingly. The reasoning is based on the policy outlined in the circular, which sets monetary limits for appeals. The ratio decidendi is that appeals with a low tax effect, falling below the prescribed monetary limits for High Court appeals, need not be pursued. The operative direction was to dispose of the appeal. The Court explicitly reserved the liberty for the Revenue to revive the tax appeal in case of any difficulty, implying that the decision was not on the merits of the underlying tax dispute but on procedural grounds related to the appeal's maintainability.

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 Atul Limited (Assessee). The appeal was notified for passing an appropriate order due to its low tax effect. The High Court noted that the appeal was not pressed by the Revenue in light of Circular No. 17/2019, dated August 8, 2019, issued by the Central Board of Direct Taxes, which provides monetary limits for filing appeals. The circular outlines monetary limits for appeals before the Appellate Tribunal (Rs. 50,00,000), High Court (Rs. 1,00,00,000), and Supreme Court (Rs. 2,00,00,000). The High Court disposed of the appeal 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 issued by the CBDT? The Revenue argued that the appeal was not pressed due to the low tax effect, referencing Circular No. 17/2019. The Assessee's arguments are not recorded in the judgment. The core issue revolves around the application of the CBDT circular to determine the maintainability of the appeal before the High Court.

AI-generated summary — verify with the full judgment below

C/TAXAP/822/2018 ORDER DATED: 07/01/2022 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 822 of 2018 ========================================================== PRINCIPAL COMMISSIONER OF INCOME TAX 1 Versus ATUL LIMITED ========================================================== Appearance: MR MANISH R. BHATT, SENIOR ADVOCATE FOR M R BHATT & CO. (5953) for the Appellant(s) No. 1 RULE UNSERVED(68) 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/822/2018 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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