THE COMMISSIONER OF INCOME TAX vs. M/S SURAJ MARBLES PVT LTD

1 D.B. INCOME TAX APPAEL NO. 293/2008 & 435/2008 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR. JUDGMENT (1) D.B. INCOME TAX APPEAL NO. 293/2008 The Commissioner of Income Tax, Ajmer. Appellant Versus M/s. Suraj Marbles Pvt. Ltd., Madanganj-Kishangarh. Respondent. WITH (2) D.B. INCOME TAX APPEAL NO. 435/2008 The Commissioner of Incoe Tax, Ajmer. Appellant Versus M/s. Suraj Marbles Pvt. Ltd., Madanganj-Kishangarh. Respondent. DATE OF JUDGMENT : 19.11.2016 HON'BLE MR. JUSTICE MOHAMMAD RAFIQ HON'BLE MR. JUSTICE MAHENDRA MAHESHWARI Mr. Mukesh Meena on behalf of Ms. Parinitoo Jain, for the appellant. Mr. A.K. Sharma, Senior Counsel assisted by Mr. Rachit Sharma, for the respondent. BY THE COURT: These two appeals are directed against order of the Income Tax Appellate Tribunal and indisputably, the tax effect in these appeals, as brought to our notice, is less than

2 D.B. INCOME TAX APPAEL NO. 293/2008 & 435/2008 Rs.20 lac. The Central Board of Direct Taxes, 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, issued Circular No. 21/2015 dated 10.12.2015 providing the monetary limits for filing appeals by the Revenue before the Tribunal, High Courts and Apex Court with an object to reduce litigation. Relevant para nos.3, 8, 9 and 10 reads as under:- “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 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

3 D.B. INCOME TAX APPAEL NO. 293/2008 & 435/2008 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.” The extract of the paragraphs referred to supra, clearly indicates that limits specified in para 3 may not apply to certain exceptions specified in para 8. Para nos.9 and 10 of the Circular if read conjointly, clearly envisage that the present instructions will apply retrospectively to all the pending appeals and appeals to be filed henceforth in High

4 D.B. INCOME TAX APPAEL NO. 293/2008 & 435/2008 Courts/Tribunals, subject to certain 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 considering that in these appeals, tax effect being less than what has been prescribed for filing appeal before the High Courts, the Revenue has chosen not to press them. It is, however, made clear that the substantial questions of law raised in the instant appeals, if any, are left open to be examined in an appropriate proceeding, if arises in future. At the same time, we deem it appropriate to observe that if any of these appeals falls in any of the exceptions as referred to in the Circular dt. 10/12/2015, the Revenue will be at liberty to move an application for revival thereof if so advised. Accordingly, in the light of the CBDT Circular dated 10.12.2015, the appeals stand dismissed as not pressed. Office is directed to place a copy of this judgment on record of connected file. (MAHENDRA MAHESHWARI),J. (MOHAMMAD RAFIQ),J.

Manoj.