C I T vs. MS MEGHNA GOEL

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ITA/111/2004HC RajasthanRJHC02029335200313 April 20166 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the appeals/references should be dismissed as not pressed, taking into account CBDT Circular No. 21/2015 and the fact that the tax effect in these cases was less than Rs. 20 lakhs, which is the prescribed monetary limit for filing appeals before the High Courts. The Court clarified that the substantial questions of law raised in these appeals/references, if any, are left open to be examined in future appropriate proceedings. The Revenue was granted liberty to move an application for recalling the order if any of the appeals/references fell within the exceptions enumerated in the Circular, such as challenges to constitutional validity, illegality of Board's orders, revenue audit objections being accepted, or additions relating to undisclosed foreign assets/bank accounts. The Circular was stated to apply retrospectively to pending appeals.

What were the facts?

The judgment concerns multiple Income Tax Reference Applications and Income Tax Appeals filed by the Commissioner of Income Tax (CIT) against various assessees. The appeals and references were filed before the Rajasthan High Court at Jaipur Bench. The date of the order is April 13, 2016. The core of the judgment revolves around a Circular No. 21/2015 issued by the Central Board of Direct Taxes (CBDT) on December 10, 2015, which revised the monetary limits for filing appeals by the Revenue. The tax effect in the instant cases was brought to the notice of the court as being less than Rs. 20 lakhs.

What were the issues?

1. Whether the appeals/references filed by the Revenue, where the tax effect is less than Rs. 20 lakhs, should be dismissed in light of CBDT Circular No. 21/2015? Assessee's Contention: The assessee, through their counsel, implicitly argued for the dismissal of the appeals/references based on the CBDT Circular, as the tax effect was below the prescribed limit for High Court appeals. They relied on the provisions of the Circular and its retrospective application. Revenue's Contention: The Revenue, represented by its counsel, did not explicitly argue against the application of the Circular. However, the judgment notes that the Revenue was at liberty to move an application for recalling the order if the appeal/reference fell under any exceptions mentioned in the Circular.

Which sections of the Income-tax Act were involved?

Section 268A(1),Section 12A

AI-generated summary — verify with the full judgment below

1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JAIPUR BENCH JAIPUR 1. D.B. Income Tax Reference No.1/2004 CIT, Jaipur Vs. Laxman Parashar Sawaimadhopur 2. D.B. Income Tax Reference No.2/2004 CIT Jaipur Vs. Laxman Parashar Sawaimadhopur 3. D.B. Income Tax Reference No.3/2004 CIT Jaipur Vs. Laxman Parashar Sawaimadhopur 4. D.B. Income Tax Reference No.4/2004 CIT Jaipur Vs. Laxman Parashar Sawaimadhopur 5. D.B. Income Tax Reference No.6/2004 CIT Jaipur Vs. Laxman Parashar Sawaimadhopur 6. D.B. Income Tax Reference No.7/2004 CIT Jaipur Vs. Laxman Parashar Sawaimadhopur 7. D.B. Income Tax Reference No.13/2004 CIT Jaipur Vs. M/s. P.V. Jwellers, Jaipur 8. D.B. Income Tax Reference No.20/2004 CIT Jaipur Vs. M/s. Hazarimal Milapchand, Soorana, Jaipur 9. D.B. Income Tax Reference No.21/2004 CIT Vs. M/s. KD Jhaveri, Jaipur 10. D.B. Income Tax Appeal No.825/2004 CIT, Kota Vs. Shri Chandi Ram 11. D.B. Income Tax Appeal No.73/1999 CIT, Bikaner Vs. Smt. Prem Lata Kedia 12. D.B. Income Tax Appeal No.50/2001 Commissioner of Wealth Tax, Jaipur Vs. Sundermal Kedia

2 13. D.B. Income Tax Appeal No.32/2002 CIT, Bikaner Vs. Shri Mukesh Kedia 14. D.B. Income Tax Appeal No.98/2002 CIT, Bikaner Vs. Smt. Amita Kedia 15. D.B. Income Tax Appeal No.159/2002 CIT, Bikaner Vs. Kedia International 16. D.B. Income Tax Appeal No.60/2004 CIT, Jaipur-I, Jaipur Vs. Smt. Shashibala Goel 17. D.B. Income Tax Appeal No.61/2004 CIT, Jaipur-I, Jaipur Vs. Smt. Sashibala Goel 18. D.B. Income Tax Appeal No.62/2004 CIT, Jaipur-I, Jaipur Vs. Ms Meghna Goel 19. D.B. Income Tax Appeal No.111/2004 CIT, Jaipur-I, Jaipur Vs. Ms. Meghna Goel Date of Order ::: 13.04.2016

HON'BLE MR. JUSTICE

M.N. BHANDARI HON'BLE MR. JUSTICE VIJAY KUMAR VYAS Mrs. Parinitoo Jain with ) Mr. Mukesh Meena ) Mr. Ashwini Jaiman ) Mr. Saurabh Jain & ) Mr. Anuroop Singhi ) for the appellants. Mr. NK Jain with ) Ms. Priya Srivastava & ) Mr. Raj Kumar Yadav ) Mr. Ravi Bhojak ) Mr. Siddarth Ranka, ) for the assessee. Instant appeals/reference are directed

3 against order of the Income Tax Appellate Tribunal and indisputably the tax effect as brought to our notice, is less than Rs.20 lac. A Circular No.21/2015 has been issued by the Central Board of Direct Taxes dated 10.12.2015 in exercise of its power u/sec. 268A (1) of the Income-tax Act 1961 in supersession of the Boards instruction No.5/2014 dt.10.7.2014 regularising the monetary limits for filing the appeals by the Revenue before the Tribunal, High Courts and Apex Court with an object for reducing litigation. Relevant para nos.3, 8, 9 and 10 reads ad infra :- “3. Henceforth, appeals/SLPs shall not be filed in cases where the tax effect does not exceed the monetary limits given hereunder :- S. No. Appeals in Income- tax matters Monetary Limit (in Rs.) 1 Before

Appellate Tribunal 10,00,000/- 2 Before High Court 20,00,000/- 3 Before Supreme Court 25,00,000/- It is clarified that an appeal should not be filed merely because the tax effect in a case exceeds the monetary limits prescribed above. Filing of appeal in such cases is to be decided on merits of the case. 4. xxx xxx xxx

4 5. xxx xxx xxx 6. xxx xxx xxx 7. xxx xxx xxx 8. Adverse judgments relating to the following issues should be contested on merits notwithstanding that the tax effect entailed is less than the monetary limits specified in para 3 above or there is no tax effect: (a) Where the Constitutional validity of the provisions of an Act or Rule are under challenge, or (b) Where

Board's

order, Notification, Instruction or Circular has been held to be illegal or ultra vires, or (c) Where Revenue Audit objection in the case has been accepted by the Department, or (d) Where the addition relates to undisclosed

foreign

assets/bank accounts. 9. The monetary limits specified in para 3 above shall not apply to writ matters and direct tax matters other than Income tax. Filing of appeals in other Direct tax matters shall continue to be governed by relevant provisions of statute & rules. Further, filing of appeal in cases of Income Tax, where the tax effect is not quantifiable or not involved, such as the case of registration of trusts or institutions under section 12 A of the IT Act, 1961, shall not be governed by the limits specified in para 3 above and decision to file appeal in such cases may be taken on merits of a particular case. 10. This instruction will apply retrospectively to pending appeals and appeals to be filed henceforth in High Courts/Tribunals. Pending appeals below the specified tax limits in para 3 above may be withdrawn/not pressed. Appeals before the Supreme Court will be governed by the instructions on this subject, operative at the time when such appeal was filed.”

5 The extract of the paragraphs referred to supra, clearly indicates that the limits specified in para 3 may not apply to certain exceptions specified in para 8, at the same time para nos.9 and 10 of the Circular if read conjointly, clearly envisages that the present

instructions

will

apply retrospectively to all the pending appeals and appeals to be filed henceforth in High Courts/Tribunals, subject to exceptions where the tax effect even if is less than Rs.20 lac, can be preferred in High Courts. Taking note of the CBDT Circular dt. 10/12/2015 and the tax effect which indisputably in the instant case is less than Rs.20 lac, much less than what has been prescribed for filing appeal/reference before the High Courts, deserves to be dismissed as not pressed. However, it is made clear that the substantial questions of law raised in the instant appeals/reference, if any, are left open to be examined in an appropriate proceeding, if arises in future. At the same time we consider it appropriate to observe that if the appeal/reference falls in any of the exceptions as referred to in the Circular

6 dt. 10/12/2015, the Revenue will be at liberty to move an application for recalling of the order if so advised. Accordingly, in the light of the CBDT Circular

dated

10.12.2015

the appeals/reference stand dismissed as not pressed. Let a copy of this order be placed in each file separately. (VIJAY KUMAR VYAS),J (M.N. BHANDARI),J sunita/52to61&63,64,66,69,70,73,75,76,78 All corrections made in the judgment/order have been incorporated in the judgment/order being e-mailed. Sunita Kanwar Jr.P.A.

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