THE COMMISSIONER OF INCOME TAX EXEMPTIONS CHD vs. M/S MAHABIR EDUCATIONAL WELFARE SOCIETY

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ITA/120/2016HC Punjab & HaryanaPHHC01110303201601 September 2016Bench: MR. JUSTICE M.M. AGGARWAL,MR. JUSTICE AVNEESH JHINGAN2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal filed by the revenue. The Court noted that the tax effect was less than ₹20 lacs, which is below the limits prescribed by Circular No. 21/2015. The Court found that paragraph 8 of the circular did not assist the appellant as the constitutional validity of the provisions of the Act or Rules was not challenged. Furthermore, the Court held that paragraph 9 of the circular, which deals with exceptions to the monetary limits, was also not applicable. The Court clarified that the issue of registration of the respondent-assessee under Section 12A of the Income Tax Act, 1961, did not arise in this appeal; rather, the issue involved was the assessment per se. Therefore, the appeal was dismissed on the ground of not meeting the monetary limits prescribed by the circular, and the merits of the matter were not considered. The Court also stated that this order does not preclude the appellant from adopting other proceedings in accordance with law.

What were the facts?

This is an appeal filed by the Commissioner of Income Tax (Exemptions), Chandigarh (appellant/revenue) against an order of the Income Tax Appellate Tribunal (Tribunal) concerning Assessment Year 2006-07. The respondent is M/s Mahabir Educational Welfare Society (assessee). The appellant contended that the Tribunal's findings were perverse. However, the appeal was considered in light of Circular No. 21/2015, which prescribes monetary limits for filing appeals. The tax effect in this case was stated to be less than ₹20 lacs. The appellant argued that certain paragraphs of the circular should allow the appeal to be heard on merits.

What were the issues?

1. Whether the appeal filed by the revenue is maintainable despite the tax effect being below the monetary limit prescribed by Circular No. 21/2015, considering the nature of the issue involved. Assessee's Contentions: Not recorded in the judgment. Revenue's Contentions: The revenue argued that the findings of the Tribunal were entirely perverse, implying the appeal should be adjudicated on merits. They relied on Circular No. 21/2015, specifically paragraphs 8 and 9, to argue for the maintainability of the appeal. Paragraph 8 was cited to suggest the appeal should be heard, and paragraph 9 was quoted to highlight exceptions to the monetary limits, particularly concerning cases where the tax effect is not quantifiable or not involved, such as registration of trusts under Section 12A of the Income Tax Act, 1961. However, the revenue's argument regarding paragraph 9 was countered by the Court.

Which sections of the Income-tax Act were involved?

Section 12A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Sr. No.208 ITA No.120 of 2016 Date of decision: 01.09.2016 The Commissioner of Income Tax (Exemptions), Chandigarh ....Appellant versus M/s Mahabir Educational Welfare Society ....Respondent CORAM: HON'BLE MR. JUSTICE S.J. VAZIFDAR, CHIEF JUSTICE HON'BLE MR. JUSTICE DEEPAK SIBAL * * * * Present:- Mr. Denesh Goyal, Advocate for the appellant. Mr. Nitin Kaushal, Advocate for the respondent. * * * * S.J. VAZIFDAR,

CHIEF JUSTICE (ORAL)

This is an appeal against the order of the Tribunal relating to the Assessment Year 2006-07. Admittedly, the tax effect is less than `20 lacs, in other words, it is less than the limits prescribed by Circular No.21/2015 dated 10.12.2015. 2. Learned counsel appearing on behalf of the appellant states that the findings of the Tribunal are entirely perverse. That is an issue which would have been adjudicated provided the appeal was not liable to be dismissed in view of the afore-referred circular. 3. Paragraph No.8 of the said circular does not come to the appellant's assistance to maintain the present appeal as in the present appeal constitutional validity of the provisions of the Act or the Rule is Jyoti Sharma 2016.09.05 17:34 I attest to the accuracy and integrity of this document

ITA No.120 of 2016 -2- not challenged. 4. Paragraph No.9 of the said circular also does not further the case of the appellant. It reads as under:- “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 of institutions under Section 12A 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.” The issue of registration of the respondent-assessee does not arise in this appeal. The issue involved is of the assessment per se. 5. The appeal is, therefore, dismissed. Needless to add that the merits of the matter have not been considered. Nor does this order preclude the appellant from adopting any other proceedings in accordance with law. (S.J. VAZIFDAR) CHIEF JUSTICE (DEEPAK SIBAL) JUDGE September 01, 2016 Jyoti 1 (i) Whether speaking/reasoned Yes/No (ii) Whether reportable Yes/No Jyoti Sharma 2016.09.05 17:34 I attest to the accuracy and integrity of this document

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