Income Tax Department vs. M/S Life Care International

ITA/109/2022HC Madhya Pradesh05 February 2025Bench: HON'BLE SHRI JUSTICE SUSHRUT ARVIND DHARMADHIKARI2 pages

For Petitioner: Veena Mandlik

AI SummaryDismissed

What did the High Court hold?

The High Court held that the appeal filed by the Revenue is not maintainable. The Court observed that CBDT Circular No. 5/2024 dated 15/03/2024, which was later amended by Circular No. 9/2024 dated 17/09/2024, supersedes the earlier circulars of 11/07/2018 and 08/08/2019. Crucially, the later circulars do not provide for an exception clause (like 10(C)) that would permit filing an appeal notwithstanding the tax effect being below the monetary limits. Therefore, as the tax effect of Rs. 1.02 Crore was below the specified monetary limits and no exception applied, the appeal was dismissed. The appellant was granted liberty to file an application if the cause of action survives as per law.

What were the facts?

The Income Tax Department (appellant) filed an appeal under Section 260A of the Income Tax Act, 1961, before the High Court of Madhya Pradesh at Indore. The appeal was against an order passed by the Income Tax Appellate Tribunal, Indore, in ITA No. 335/IND/2018 dated 01.09.2021. The sole controversy revolved around the maintainability of the appeal before the High Court, specifically concerning the applicability of exception Clause 10(C) of CBDT Circular No. 3/2018 dated 11.07.2018. The tax effect involved in the case was Rs. 1.02 Crore, which was below the monetary limits stipulated in subsequent CBDT Circulars.

What were the issues?

1. Whether the appeal filed by the Revenue is entertainable before this Court under exception Clause 10(C) of CBDT Circular No. 3/2018 dated 11/07/2018, notwithstanding that the tax effect involved (Rs. 1.02 Crore) is below the monetary limits specified in subsequent CBDT Circulars (No. 17/2019 dated 08/08/2019 and No. 5/2024 dated 15/03/2024). Assessee's Contentions: The judgment does not record any specific contentions made by M/s Life Care International (assessee). Revenue's Contentions: The Revenue contended that the appeal should be entertained, likely by relying on the exception clause in the earlier circular, despite the tax effect being below the stipulated monetary limits in later circulars. The Revenue's appeal was filed against an order of the ITAT, suggesting a disagreement with the Tribunal's decision on merits, but the High Court's focus was solely on the procedural aspect of maintainability.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF MADHYA PRADESH AT INDORE BEFORE HON'BLE SHRI JUSTICE SUSHRUT ARVIND DHARMADHIKARI & HON'BLE SHRI JUSTICE GAJENDRA SINGH ON THE 5th OF FEBRUARY, 2025 INCOME TAX APPEAL No. 109 of 2022 INCOME TAX DEPARTMENT Versus M/S LIFE CARE INTERNATIONAL Appearance: Shri Harsh Parashar, learned Senior Standing Counsel for the appellant. ORDER Per: Justice Sushrut Arvind Dharmadhikari The instant appeal under Section 260(A) of the Income Tax Act, 1961 has been preferred by the appellant being aggrieved by the order passed by learned Income Tax Appellate Tribunal, Indore, in ITA No.335/IND/2018 dated 01.09.2021. The only controversy seems to be involved in the case as to whether the appeal filed by the Revenue would be entertainable before this Court under exception Clause 10(C) of CBDT Circular No.3/2018 dated 11/07/2018. Admittedly, the tax effect involved in the case is Rs.1.02 Crore, which is below the monetary limit as specified in the Circular No. 17/2019 dated 08/08/2019 and CBDT Circular No. 5/2024 dated 15/03/2024. On perusal of the Circular dated 15/03/2024, which was later on, 1 ITA-109-2022 NEUTRAL CITATION NO. 2025:MPHC-IND:2972 Signed by: VARSHA SINGH Signing time: 06-02-2025 10:15:18 Signature Not Verified

(SUSHRUT ARVIND DHARMADHIKARI) JUDGE (GAJENDRA SINGH) JUDGE amended by Circular No. 9/2024 dated 17/09/2024 issued by CBDT supersedes the Circular dated 11/07/2018 and 08/08/2019, it is seen that it does not provide exception clause i.e. 10(C), wherein the appeal can be filed notwithstanding the fact that the tax effect entailed is less than the monetary limits under the exceptions given. In view of above, the appeal is not maintainable. Accordingly, same is hereby dismissed. However, the appellant would be at liberty to file application, in case cause of action survives as per law. VS

2 ITA-109-2022 NEUTRAL CITATION NO. 2025:MPHC-IND:2972 Signed by: VARSHA SINGH Signing time: 06-02-2025 10:15:18 Signature Not Verified

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