Pr. Commissioner Of Income Tax I vs. M/S Gujarat Mercantile Credit Cooperative Society Ltd.

ITA/108/2017HC Madhya Pradesh31 October 2019Bench: HON'BLE SHRI JUSTICE S.C.SHARMA2 pages

For Petitioner: Veena Mandlik

AI SummaryWithdrawn

What did the High Court hold?

The High Court allowed the prayer for withdrawal of the appeal made by the Revenue's counsel. Consequently, the appeal was dismissed as withdrawn. However, the Court explicitly stated that the question of law involved in the appeal was left open. This implies that while the appeal itself was disposed of without a decision on its merits, the underlying legal issue remains undecided and could potentially be raised in future proceedings. The reasoning for withdrawal is not elaborated beyond the counsel's prayer, but it is framed within the context of CBDT circulars on appeal filing limits and exceptions.

What were the facts?

The Principal Commissioner of Income Tax, Indore (Revenue) filed an appeal under Section 260A of the Income Tax Act, 1961, before the High Court of Madhya Pradesh, Bench at Indore, against an order passed by the Income Tax Appellate Tribunal. The appeal was filed against M/s. Gujarat Mercantile Credit Cooperative Society Ltd. (Assessee). The judgment discusses various circulars issued by the Central Board of Direct Taxes (CBDT) regarding monetary limits for filing appeals before High Courts and the Supreme Court, and exceptions where appeals should be contested on merits regardless of tax effect. The Revenue's counsel sought withdrawal of the present appeal, which was allowed by the Court.

What were the issues?

1. Whether the present appeal is maintainable before this Court in light of the monetary limits prescribed by CBDT Circular No. 3/2018 and subsequent amendments, or if it falls under the exceptions for contesting on merits. Assessee's Contention: The judgment does not record any specific contentions made by the assessee. The assessee is the respondent in the appeal filed by the Revenue. Revenue's Contention: The Revenue's counsel prayed for the withdrawal of the present appeal, indicating a decision to not pursue the appeal on merits, likely due to the applicability of monetary limits or other procedural considerations not detailed in the judgment.

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. 108 / 2017 THE PRINCIPAL COMMISSIONER OF INCOME TAX Vs. M/S. GUJARAT MERCANTILE CREDIT COOPERATIVE SOCIETY LTD., * * * * * 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 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 --- 2 --- 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). 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 16:37:14 +05'30'

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