Dr. Dipankar Banerjee vs. Commissioner Of Income Tax (Appeals)

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ITA/12/2023HC Madhya Pradesh22 November 2024Bench: HON'BLE SHRI JUSTICE SUSHRUT ARVIND DHARMADHIKARI6 pages
For Petitioner: Uma Parashar
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the appeal, setting aside the ITAT's order dated 31.05.2022 passed in MA Nos. 11 and 12/JAB/2020. The primary controversy revolved around whether the Revenue's appeals, dismissed for low tax effect, were maintainable under clause 10(c) of CBDT Circular No. 17/2019. The Court noted that subsequent CBDT Circulars dated 15.03.2024 (amended by 17.09.2024) superseded earlier circulars, including the one from 08.08.2019. The new circulars do not provide an exception clause for filing appeals notwithstanding the monetary limits. Therefore, in view of the non-existence of an exception clause and the monetary limits as per the latest circulars, the issue was no longer res integra. The Court found that the ITAT's order recalling its earlier dismissal was erroneous. The ratio decidendi is that subsequent superseding circulars of the CBDT, which remove specific exceptions for filing appeals based on tax effect, render earlier appeals filed under those exceptions non-maintainable.

What were the facts?

The assessee, Dr. Dipankar Banerjee, is an individual and a Gynaecologist. The Revenue is the Commissioner of Income Tax (Appeals) and others. The assessment years in question are 2008-09 and 2009-10. The challenge is to the order dated 31.05.2022 passed by the Income Tax Tribunal (ITAT) in Miscellaneous Appeals (MA) No. 11/JAB/2020 and MA No.12/JAB/2020. The ITAT had recalled its earlier order dated 11.12.2019, which had dismissed the Revenue's appeals (ITA Nos.70 & 71/JAB/2019) on the grounds of low tax effect, not exceeding Rs.50 lakhs, as per CBDT Circular No. 17/2019. The Revenue's MA sought restoration of appeals on merits, arguing they were covered by an exceptional clause (10(c)) related to audit objections. The original assessment orders dated 21.03.2016 made additions of Rs.2,70,286/- for AY 2008-09 and Rs.4,59,463/- for AY 2009-10.

What were the issues?

1. Whether the Income Tax Tribunal erred in recalling its order dated 11.12.2019 and restoring the Revenue's appeals for hearing on merits, despite the tax effect being below Rs.50 lakhs as per CBDT Circular No. 17/2019? Assessee's contentions: The Tribunal erred in allowing the Miscellaneous Appeals filed by the Revenue. The ITAT's earlier order dated 11.12.2019 correctly noted that there was no record to prove acceptance of the audit objection. The Revenue's application under Section 254(2) of the Income Tax Act, 1961, was an afterthought, and they failed to prove that the appeals were covered by the exception under clause 10(c) of Circular dated 08.08.2019. The scope of rectification under Section 254(2) is limited to apparent mistakes. Revenue's contentions: The ITAT elaborately discussed the facts and rejected the appellant's contentions while deciding the M.As in favour of the Revenue. The Revenue also noted that Circular No. 05/2024, amended by Circular No. 09/2024, has superseded earlier circulars, and audit objection-related cases are no longer under an exceptional clause.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 147,Section 143(3),Section 254(2),Section 268A

AI-generated summary — verify with the full judgment below

Before: HONBLE SHRI JUSTICE SUSHRUT ARVIND & HONBLE SMT. JUSTICE ANURADHA SHUKLA DR. DIPANKAR BANERJEE

1 NEUTRAL CITATION NO. 2024:MPHC-JBP:57163

ITA NO. 12 OF 2023

IN THE HIGH COURT OF MADHYA PRADESH AT JABALPUR BEFORE HON'BLE SHRI JUSTICE SUSHRUT ARVIND DHARMADHIKARI & HON'BLE SMT. JUSTICE ANURADHA SHUKLA INCOME TAX APPEAL No. 12 of 2023 DR. DIPANKAR BANERJEE Versus COMMISSIONER OF INCOME TAX (APPEALS) AND OTHERS

--------------------------------------------------------------------------------------- Appearance : MS. UMA PARASHAR – ADVOCATE FOR THE APPELLANT. SHRI SIDDHARTH SHARMA – SENIOR STANDING COUNSEL THROUGH V.C. AND SHRI SUBHAM MANCHANI – ADVOCATE FOR THE RESPONDENTS. --------------------------------------------------------------------------------------- Reserved on :- 05/09/2024 Pronounced on:- 22/11/2024 ----------------------------------------------------------------------------------------- The instant appeal is coming on for admission, heard finally this day, Justice Sushrut Arvind Dharmadhikari passed the following: O R D E R The instant appeal under Section 260-A of Income Tax Act, 1961 has been preferred by the appellant being aggrieved by the common order Signed by: ANAND KRISHNA SEN Signing time: 11/23/2024 11:54:55 AM Signature Not Verified 2 NEUTRAL CITATION NO. 2024:MPHC-JBP:57163

ITA NO. 12 OF 2023

dated dated 31.05.2022 passed in MA No. 11/JAB/2020 AND MA No.12/JAB/2020 for Assesment Year 2008-09 and 2009-10, respectively whereby the learned Income Tax Tribunal has recalled its order dated 11.12.2019 passeed in ITA Nos.70 & 71/JAB/2019 and restored the said appeals for passing the order on merits. The abovementiond appeals were filed by the Revenue being dissatisfied with the order of Commissioner, Income Tax against the order of assesment and same were dismissed by the ITAT being not maintainable in the light of Circular No. 17/2019, dated 08/08/2019, issued U/s 268A of the Income Tax Act, whereby it has been directed by CBDT that in case the tax effect does not exceed Rs.50 lakhs, the appeal before the Tribunal may not be pressed. It is pertinent to mention herein that admittedly, in both the Departmental appeals the tax effect was below Rs.50 lakh. 2. Brief facts of the case are that the appellant is an individual working as a Gynaecologist and specialist in fertility medication and runs Fertility Clinic alongwith his wife Dr. Rinku Banerji, Radiologist at Jabalpur. The assessment under Section 147 read with 143 (3) of the Income Tax Act, 1961 was done on 21.03.2016 and addition of Rs.2,70,286/- for Assesemt Year 2008-09 and addition of Rs.4,59,463/- for Assessment Year 2009-10 was made by the Assessment Officer. Being dissatisfied, the appellant preferred appeals against the assessment orders dated 21.03.2016 before Signed by: ANAND KRISHNA SEN Signing time: 11/23/2024 11:54:55 AM Signature Not Verified 3 NEUTRAL CITATION NO. 2024:MPHC-JBP:57163

ITA NO. 12 OF 2023

respondent No.1 which were partly allowed vide order dated 26.06.2019. The Revenue challenged the said order by way of filing appeals before Income Tax Appellate Tribunal which were dismissed on 11.12.2019 on the ground of maintainability reasons for tax effect being less than 50 lakhs in appeals in the light of circular No. 17/2019, dated 08/08/2019 issued by CBDT. Thereafter, the respondent filed Miscellaneous Appeal registered as M.A11/JAB/2020 and M.A12/JAB/2020 for both the assessment years before the ITAT stating therein that the ITAT has erred in dismissing the appeal filed by the department without going into the merits of the case and appeal was maintainable being covered under exceptional clause 10(c) given in Circular dated 08.08.2019 regarding acceptance of audit objection. The ITAT recalled its earlier order dated 11.12.2019 and restored the appeal to hear on merits. 3. Learned counsel for the appellant submitted that the Tribunal without appreciating the facts of the case and the submissions made by the assessee allowed the M.As filed by the Revenue. The Income Tax Appellate Tribunal by its order dated 11.12.2019 clearly stated that there is nothing available on record to prove that the audit objection was accepted in the case. It is clear that if there was anything on record to support the contention of the revenue same was not brought to the notice of the bench at the time of hearing of the appeal. Application filed under section 254(2) Signed by: ANAND KRISHNA SEN Signing time: 11/23/2024 11:54:55 AM Signature Not Verified 4 NEUTRAL CITATION NO. 2024:MPHC-JBP:57163

ITA NO. 12 OF 2023

by the Revenue is nothing but after thought whereas Revenue could not prove that the appeal were covered by exception provided under clause 10(c) of the Circular issued by the CBDT while hearing of appeals. He further argued that the scope of rectification under 254 (2) of Income Tax Act, 1961 is very limited to the apparent mistake demonstrable in the order of tribunal. 4. On the other hand, all the contentions raised by the petitioner are vehemently denied by the respondent submitting that while passing the order in the said M.As. the ITAT had elaborately discussed the facts of the case and accordingly rejected the contentions of the appellant herein and decided the M.A. in favour of Revenue. However, he stated in his return that Circular No. 05/2024 dated 15.03.2024, which was later on, amended by Circular No. 09/2024, vide order dated 17.09.2024 issued by CBDT has superseded all the earlier circular and audit objection related case is no longer under the exceptional clause. 5. Heard. 6. The only controversy seems to be involved in the case as to whether the appeals filed by the Revenue before the ITAT would be entertainable under clause 10(c) of the Circular No. 17/2019, dated 08/08/2019, issued by the CBDT. Signed by: ANAND KRISHNA SEN Signing time: 11/23/2024 11:54:55 AM Signature Not Verified 5 NEUTRAL CITATION NO. 2024:MPHC-JBP:57163

ITA NO. 12 OF 2023

7.

On perusal of the circular dated 15.03.2024, which was later on, amended by Circular No. 09/2024, vide order 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 wherein the appeal can be filed notwithstanding that the tax effect entailed is less than the monitory limits under the exception given. 8. In view of the aforesaid, the issue involved herein is no longer res- integra and present Income Tax Appeal stands allowed keeping in view non-existence of exception clause as well as monitory limit as per Circulars dated 15.03.2024 read with Circular dated 17/09/2024. Accordingly, order dated 31/05/2022 passed in M.A. Nos. 11 and 12/JAB/2020 (Annexure A/7) is hereby set aside. No order as to costs. (SUSHRUT ARVIND DHARMADHIKARI) (ANURADHA SHUKLA) JUDGE JUDGE skt

Signed by: ANAND KRISHNA SEN Signing time: 11/23/2024 11:54:55 AM Signature Not Verified 6 NEUTRAL CITATION NO. 2024:MPHC-JBP:57163

ITA NO. 12 OF 2023

Signed by: ANAND KRISHNA SEN Signing time: 11/23/2024 11:54:55 AM Signature Not Verified

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