THE COMMISSIONER OF INCOME TAX vs. S.P.BAGLA

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ITA/493/2005HC DelhiDLHC01059489200509 January 2017Bench: HON'BLE MR. JUSTICE S. RAVINDRA BHAT,HON'BLE MR. JUSTICE NAJMI WAZIRI2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the appeals filed by the Revenue were not maintainable as the tax effect was below the prescribed monetary limit of ₹20,00,000/- as per CBDT Circular No. 21/2015. The Court applied Clause 10 of the Circular, which stated that pending appeals below the specified tax limits could be withdrawn or not pressed. The reasoning was that the circular was intended to streamline litigation and reduce the burden on higher courts. The ratio decidendi is that appeals that do not meet the minimum tax effect threshold stipulated by the CBDT are liable to be dismissed on grounds of maintainability, irrespective of the merits of the case. The appeals were dismissed, with a clarification that the Revenue could seek restoration if the Assessing Officer identified any exceptions under the said Circular.

What were the facts?

This is an appeal by the Commissioner of Income Tax (Revenue) against an order of the Income Tax Appellate Tribunal (ITAT) concerning the assessment year(s) not specified. The appeal is before the High Court of Delhi. The primary reason for the disposal of the appeals is a Circular No. 21/2015 issued by the Central Board of Direct Taxes (CBDT) which stipulated monetary limits for filing appeals. Clause 10 of this circular allowed for pending appeals below specified tax limits to be withdrawn or not pressed. The High Court noted that the tax effect in the present appeals was below the prescribed limit of ₹20,00,000/-. The appeals were consequently dismissed.

What were the issues?

1. Whether the appeals filed by the Revenue are maintainable before the High Court given the tax effect is below the monetary limit prescribed by CBDT Circular No. 21/2015. (Question of law) The Revenue, represented by Mr. Zoheb Hossain, Sr. Standing Counsel, did not argue the merits of the case. The Court itself noted the applicability of CBDT Circular No. 21/2015, specifically Clause 10, which advised withdrawal or non-pressing of pending appeals below the specified tax limits. The Court observed that the tax effect in the present appeals was below the limit of ₹20,00,000/-. The Respondent, S.P. Bagla, represented by Mr. K.R. Manjani with Mr. Tarun Aswani, Advocates, did not present any arguments as the matter was decided based on the circular and the tax effect.

AI-generated summary — verify with the full judgment below

$~28 * IN THE HIGH COURT OF DELHI AT NEW DELHI +

ITA 493/2005

THE COMMISSIONER OF INCOME TAX ..... Appellant Through: Mr. Zoheb Hossain, Sr. Standing Counsel.

versus

S.P.BAGLA

..... Respondent Through: Mr. K.R. Manjani with Mr. Tarun Aswani, Advocates.

CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE NAJMI WAZIRI

O R D E R %

09.01.2017

This Court had framed a question of law for consideration in these appeals. Given its pendency vide Circular No. 21/2015 dated 10.12.2015, the Central Board of Direct Taxes (CBDT) spelt out the monetary limits beyond which appeals could be preferred before the Income Tax Appellate Tribunal (ITAT), High Courts and SLP before the Supreme Court respectively. Clause 10 of the Circular reads as below:- “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.”

This Court notices that the tax effect i.e. upon the assessed income, is below the prescribed limit of `20,00,000/-. The present appeals cannot be, therefore, prosecuted and are no longer maintainable. It is, however, clarified that in the event, the Assessment Officer discerns any exception in terms of the said Circular, it is open to the Revenue to seek restoration of the concerned appeals by an appropriate application. The appeals are dismissed but in the above terms.

S. RAVINDRA BHAT, J

NAJMI WAZIRI, J JANUARY 09, 2017 /vikas/

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