PRINCIPAL COMMISSIONER OF INCOME TAX-2 vs. KEYSTONE SOLUTION P. LTD

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TAXAP/1026/2017HC GujaratGJHC24057243201727 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 of Gujarat held that the tax appeal is not pressed by the Revenue in view of the low tax effect, as per Circular No. 17/2019 dated August 8, 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 administrative decision by the Revenue to withdraw appeals below a certain monetary threshold to streamline litigation. The ratio decidendi is that appeals with a low tax effect, as defined by CBDT circulars, are not to be pursued. The operative direction was to dispose of the appeal, with liberty reserved for the Revenue to revive it if any difficulty arises.

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 Keystone Solution P. Ltd (Assessee). The appeal was notified for an appropriate order due to low tax effect. The Revenue chose 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 new monetary limits for filing appeals. The judgment notes 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 appeal should be dismissed on the grounds of low tax effect as per Circular No. 17/2019? (Question of law) Assessee's Contention: The assessee did not explicitly argue any points as the appeal was not pressed by the Revenue. Revenue's Contention: The Revenue submitted that the appeal is not pressed in view of the low tax effect, citing Circular No. 17/2019, dated August 8, 2019. The circular establishes revised 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 falls below the prescribed limit, making it not pressable.

AI-generated summary — verify with the full judgment below

C/TAXAP/1026/2017 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 1026 of 2017 ========================================================== PRINCIPAL COMMISSIONER OF INCOME TAX-2 Versus KEYSTONE SOLUTION P. LTD ========================================================== Appearance: MR.VARUN K.PATEL(3802) for the Appellant(s) No. 1 MR B S SOPARKAR(6851) 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/1026/2017 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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