The Principal Commissioner Of Income Tax (Central) vs. Shri Mohanlal Chugh

ITA/10/2016HC Madhya Pradesh31 October 2019Bench: HON'BLE SHRI JUSTICE S.C.SHARMA3 pages

For Petitioner: Veena Mandlik

AI SummaryWithdrawn

What did the High Court hold?

The Tribunal noted that the appeals were covered under the circulars issued by the Department. The learned counsel for the appellant (Revenue) prayed for the withdrawal of the present appeals, which was allowed by the High Court. Consequently, the appeals were dismissed as withdrawn. However, the High Court explicitly stated that the question of law was left open. This implies that while the appeals were disposed of on procedural grounds (withdrawal), the underlying legal issues were not adjudicated on their merits. The ratio decidendi is that an appeal can be withdrawn if it is covered by departmental circulars and the appellant seeks such withdrawal, with the liberty to revisit the question of law if necessary.

What were the facts?

The appeals were filed by the Principal Commissioner of Income Tax, Indore, against orders passed by the Income Tax Appellate Tribunal. The appeals concerned assessment years not specified in the judgment. The appeals were filed under Section 260A of the Income Tax Act, 1961. The Central Board of Direct Taxes had issued circulars (3/2018, revised 20/08/2018, and further circulars on 08/08/2019 and 06/09/2019) specifying monetary limits for filing appeals before High Courts and the Supreme Court, with exceptions for certain types of cases to be contested on merits. The appellant's counsel sought withdrawal of the present appeals, citing that they were covered under these departmental circulars.

What were the issues?

1. Whether the present appeals are covered by the monetary limits specified in the circulars issued by the Central Board of Direct Taxes for filing appeals before the High Court, or if they fall under the exceptions allowing appeals on merits irrespective of tax effect? The Assessee (Shri Mohanlal Chugh, Shri Nitesh Chugh, and Smt. Ranidevi Chugh) did not present any arguments as the appeal was withdrawn by the Revenue. The Revenue (The Principal Commissioner of Income Tax) argued that the appeals were covered under the circulars issued by the Department, specifically referencing Circular No. 3/2018 (as amended by circular dated 20/08/2018) and subsequent circulars concerning monetary limits and exceptions for appeals on merits. The Revenue prayed for withdrawal of the appeals.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

--- 1 --- HIGH COURT OF MADHYA PRADESH : BENCH AT INDORE D.B.: HON'BLE MR. S. C. SHARMA AND HON'BLE MR. SHAILENDRA SHUKLA, JJ INCOME TAX APPEAL No. 10 / 2016 THE PRINCIPAL COMMISSIONER OF INCOME TAX Vs. SHRI MOHANLAL CHUGH INCOME TAX APPEAL No. 11 / 2016 THE PRINCIPAL COMMISSIONER OF INCOME TAX Vs. SHRI NITESH CHUGH INCOME TAX APPEAL No. 13 / 2016 THE PRINCIPAL COMMISSIONER OF INCOME TAX Vs. SMT. RANIDEVI CHUGH * * * * * O R D E R (31/10/2019) PER : S. C. SHARMA, J :- The present appeal has been filed u/S. 260A of the Income Tax Act 1961 by the Commissioner of Income Tax Indore against the order passed by the Income Tax Appellate Tribunal. The Central Board of Direct Taxes has issued a circular No. 3/2018 fixing the monetary limit for filing of appeals before the High Courts and before the Supreme Court. However, certain appeals are to be decided on merits. Paragraph 10 of the Circular dated 11/07/2018 reads as under: Para 10 of the Circular dated 11/7/2018 reads as under : 10. 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 is under challenge, or (b) Where Board's order, Notification, Instruction or --- 2 --- 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. That the circular no. 3/2018 was further revised by the circular dated 20/08/2018 and paragraph 10 was amended as under : 3. Para 10 of the said Circular provides that adverse judgments relating to the issues enumerated in the said para should be contested on merits notwithstanding that the tax effect entailed is less than the monetary limits specified in para 3 thereof or there is no tax effect. Para 10 of the Circular No.3 of 2018 dated 11/7/2018 is hereby amended as under: 10. 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 is 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 income / undisclosed foreign assets (including financial assets) / undisclosed foreign bank account. (e) Where addition is based on information received from external sources in the nature of law enforcement agencies such as CBI / ED / DRI / SFIO / Directorate General of GST Intelligence (DGGI). (f) Cases where prosecution has been filed by the Department and is pending in the Court. Thereafter another circular was issued on 08/08/2019 and the monetary limit was enhanced to Rs. 1.00 crore in respect of High Court. A further clarificatory circular was issued on 6th September, 2019 and the Department has been permitted, irrespective of valuation, to file an appeal on merits in cases involved in organized tax evasion activity (Circular dated 6th September, 2019). --- 3 --- The present appeal is covered under the circular issued by the Department and the learned counsel for the appellant prays for withdrawal of the present appeal. The prayer is allowed. The appeal is dismissed as withdrawn. However, the question of law is left open. (S. C. SHARMA) J U D G E (SHAILENDRA SHUKLA) J U D G E KR Digitally signed by Kamal Rathor Date: 2019.11.04 14:39:00 +05'30'

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