Principal Commissioner Of Income Tax (Central) vs. Smt.Reenadevi Chugh

ITA/13/2016HC 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 High Court allowed the prayer for withdrawal of the appeals. The Court held that the present appeals are covered under the circulars issued by the Department. Consequently, the appeals were dismissed as withdrawn. However, the Court explicitly stated that the question of law is left open. This implies that while the appeals were disposed of on procedural grounds (withdrawal), the underlying legal issues remain undecided and can be raised in future proceedings if applicable. The operative direction was the dismissal of the appeals as withdrawn.

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 concern 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 (CBDT) had issued circulars (No. 3/2018, revised on 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. However, certain categories of adverse judgments were to be contested on merits irrespective of the tax effect. The learned counsel for the appellant (Revenue) prayed for withdrawal of the present appeals, citing that they were covered under the departmental circulars.

What were the issues?

1. Whether the present appeals are maintainable before this Court in light of the monetary limits prescribed by the CBDT circulars, or if they fall under the exceptions allowing appeals on merits irrespective of tax effect? The Revenue argued that the present appeals are covered under the circulars issued by the Department, implying they might not meet the monetary threshold but are permissible to be filed on merits. The Revenue's counsel prayed for withdrawal of the appeal. The judgment does not record any specific arguments from the Assessee.

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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