The Commissioner Of Income Tax I vs. M/S Sti Power India Ltd

ITA/138/2006HC Madhya Pradesh31 October 2019Bench: HON'BLE SHRI JUSTICE S.C.SHARMA2 pages

For Petitioner: Ku.Veena Mandlik/

AI SummaryWithdrawn

What did the High Court hold?

The High Court allowed the prayer for withdrawal of the appeal made by the learned counsel for the appellant (Revenue). Consequently, the appeal was dismissed as withdrawn. However, the Court explicitly stated that the question of law is left open. The reasoning for allowing the withdrawal is based on the Revenue's submission that the present appeal was covered under the circulars issued by the Department, which likely implied that it fell within the scope of appeals that could be withdrawn or were no longer being pressed based on updated departmental policy or monetary limits. The ratio decidendi is that an appeal can be withdrawn if the appellant so prays and the Court permits it, especially when the appellant's counsel indicates it is covered by departmental circulars. The operative direction is the dismissal of the appeal as withdrawn.

What were the facts?

The Commissioner of Income Tax, Indore (Revenue) filed an appeal under Section 260A of the Income Tax Act, 1961, against an order passed by the Income Tax Appellate Tribunal. The appeal was filed before the High Court of Madhya Pradesh, Bench at Indore. The judgment discusses several circulars issued by the Central Board of Direct Taxes (CBDT) concerning 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. These circulars include No. 3/2018 (dated 11/07/2018 and revised 20/08/2018), another circular on 08/08/2019 enhancing the monetary limit to Rs. 1.00 crore for High Courts, and a clarificatory circular dated 6th September, 2019, permitting appeals on merits in cases of organized tax evasion.

What were the issues?

1. Whether the present appeal is covered by the exceptions stipulated in the CBDT circulars for contesting appeals on merits, notwithstanding the monetary limits. The Revenue contended that the appeal was filed under Section 260A of the Income Tax Act, 1961. The judgment extensively discusses various CBDT circulars that set monetary limits for filing appeals and provide exceptions for certain types of cases to be contested on merits. The Revenue's counsel ultimately prayed for the withdrawal of the appeal, indicating that the appeal was covered under these circulars and the prayer was allowed. The judgment does not record any specific arguments from the assessee, M/s. STI Power India Ltd., nor does it detail the specific grounds on which the original appeal before the Tribunal was decided.

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. 138 / 2006 THE COMMISSIONER OF INCOME TAX Vs. M/S. STI POWER INDIA 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 merits notwithstanding that the tax effect entailed is less than the --- 2 --- 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 13:11:24 +05'30'

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