PRINCIPAL COMMISSIONER OF INCOME TAX-I vs. PRATAP TECHNOCRATS PRIVATE LIMITED

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ITA/57/2024HC RajasthanRJHC02028190202427 September 2024Bench: AVNEESH JHINGAN,PRAVEER BHATNAGAR3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal filed by the Revenue as not maintainable. The Court distinguished between 'tax not quantifiable' and 'tax not quantified'. The Revenue's contention was found to lack merit. The Court noted the assessee's submission that even in an extreme scenario, the disallowance of deduction would be approximately Rs. 3 crores, resulting in a tax effect of approximately Rs. 1 crore. In light of Circular 9 of 2024, which governs the maintainability of appeals based on tax effect, the Court concluded that the appeal was not maintainable. The proposed substantial question of law was expressly left open.

What were the facts?

The assessee, Pratap Technocrats Private Limited, filed an income tax return for Assessment Year 2018-2019 declaring a total income of Rs. 24,87,27,450/-. The Assessing Officer accepted the returned income. However, the Principal Commissioner of Income Tax, Jaipur-I, initiated proceedings under Section 263 of the Income Tax Act, 1961, citing the assessee's failure to furnish Form 10DA along with the return. This omission, according to the Commissioner, warranted disallowance of a deduction of Rs. 3,01,18,395/- claimed under Section 80JJAA. The Commissioner remanded the matter to the Assessing Authority. The Income Tax Appellate Tribunal (Tribunal) subsequently allowed the assessee's appeal against the Commissioner's order. The Principal Commissioner has now filed this appeal before the High Court.

What were the issues?

1. Whether the appeal filed by the Revenue is maintainable in light of Circular 9 dated 17.09.2024, considering the tax effect and the nature of the order passed under Section 263 of the Income Tax Act, 1961? The Revenue (appellant) argued that the appeal is maintainable. The Assessee (respondent) contended that the appeal is not maintainable based on Circular 9 of 2024, which incorporates exceptions from Circular 5 of 2024. The assessee argued that even if the entire deduction of approximately Rs. 3 crores were disallowed, the tax demand would be less than Rs. 2 crores. Furthermore, the assessee argued that non-filing of Form 10DA alone cannot be a ground for disallowing the deduction, a point previously decided in favour of the assessee by the jurisdictional court. The assessee also submitted that the case falls under Clause F of para 3.1 of Circular 5 of 2024, and the appeal is maintainable as the order is under Section 263 and the tax effect is not quantifiable.

Which sections of the Income-tax Act were involved?

Section 260A,Section 263,Section 80JJAA

AI-generated summary — verify with the full judgment below

[2024:RJ-JP:41383-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 57/2024 Principal Commissioner Of Income Tax-I, New Central Revenue Building, Statue Circle, Jaipur (Raj.). ----Appellant Versus Pratap Technocrats Private Limited, B-21, Shakti Bhawan, Shivaji Godara Colony, Jaipur. Pan/gir No. Aaicp3621R. ----Respondent For Appellant(s) : Mr. Anuroop Singhi, Adv. with Mr. Aditya Khandelwal, Adv. For Respondent(s) : Mr. Siddharth Ranka, Sr. Adv. with Ms. Satwika Jha & Ms. Apeksha Bapna, Mr. Rohan Chatter HON'BLE MR. JUSTICE AVNEESH JHINGAN HON'BLE MR. JUSTICE PRAVEER BHATNAGAR Order 27/09/2024 AVNEESH JHINGAN, (J) :- 1. This appeal under Section 260A is filed against the order dated 18.07.2023 passed by learned Income Tax Appellate Tribunal, Jaipur (for short 'Tribunal'). 2. The brief facts are that the respondent-assessee filed income tax return declaring total income of Rs.24,87,27,450/- pertaining to Assessment Year 2018-2019. The case was taken up in scrutiny and the return income was accepted. The matter was taken by the Principal Commissioner Income Tax, Jaipur-I under Section 263 of the Income Tax Act, 1961 (for short 'the Act') on the ground that the assessee had not furnished Form 10DA along with the return, resultantly, the deduction of Rs.3,01,18,395/- claimed u/S 80JJAA

[2024:RJ-JP:41383-DB] (2 of 3) [ITA-57/2024] ought to have been disallowed. The matter was remanded to the Assessing Authority to frame the assessment in view of the observations made by the Commissioner with regard to deduction under Section 80JJAA, the Tribunal accepted the appeal of the assessee. Hence the present appeal. 3. Learned counsel for the respondent raises a preliminary objection on the maintainability of the appeal in view of the Circular 9 dated 17.09.2024. The contention is that taking the case of the Department at the highest, the entire deduction even if disallowed, the tax demand would be less than two crores. It is further argued that non-filing of the Form 10DA along with the return, in itself, cannot be a ground for disallowing the deduction, has been decided in favour of the assessee by the jurisdictional Court. Learned counsel for the respondent submits that Circular 9 retains the exceptions provided in Circular 5 dated 15.03.2024. The argument is that the case in hand falls within the exception in Clause F of para 3.1 of Circular 5 of 2024. The appeal is maintainable as the order is passed under Section 263 of the Act and tax effect is not quantifiable. 4. The contention of the counsel for the appellant lacks merit. There is a distinction between 'tax not quantifiable' and 'tax not quantified'. 5. In the present case, the contention of the counsel for the respondent that even taking the case at extreme, the disallowance of deduction would be of Rupees Three Crores approximately and the tax effect would be of Rupees One Crore odd approximately.

[2024:RJ-JP:41383-DB] (3 of 3) [ITA-57/2024] 6. In view of the above, the appeal is dismissed as not maintainable in view of Circular 9 of 2024. The proposed substantial question of law is kept open. (PRAVEER BHATNAGAR),J (AVNEESH JHINGAN),J 110-Chandan/Rahul Whether Reportable: Yes / No

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