Principal Commissioner Of Income Tax I vs. Shri Gurvindar Singh Bhatia

ITA/15/2017HC 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 Revenue's counsel submitted that the present appeals were covered under the circulars issued by the Department and prayed for their withdrawal. The Court granted this prayer and dismissed the appeals as withdrawn. However, the Court explicitly stated that the question of law was left open. The reasoning for withdrawal was based on the Revenue's own assessment that the appeals fell within the scope of exceptions allowing them to be contested on merits, leading to a decision to withdraw rather than pursue them. The specific nature of the adverse judgments or the tax effect was not detailed in the judgment, but the withdrawal was based on the applicability of the circulars.

What were the facts?

The Principal Commissioner of Income Tax (Revenue) filed several appeals before the High Court of Madhya Pradesh, Bench at Indore, against orders passed by the Income Tax Appellate Tribunal. These 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. The Revenue's counsel, however, stated that the present appeals were covered under specific exceptions outlined in these circulars, which allowed appeals on merits irrespective of the tax effect. The Revenue's counsel then prayed for the withdrawal of the appeals.

What were the issues?

1. Whether the appeals filed by the Principal Commissioner of Income Tax are covered by the exceptions provided in CBDT Circular No. 3/2018 (as amended) and subsequent circulars, allowing them to be contested on merits despite potentially falling below monetary limits? Assessee's contention: Not recorded. Revenue's contention: The appeals are covered under the exceptions stipulated in the CBDT circulars, which permit contesting adverse judgments on merits, irrespective of the tax effect. These exceptions include issues related to constitutional validity, illegality of Board's orders, revenue audit objections, undisclosed foreign assets/income, information from law enforcement agencies, and pending prosecution. The Revenue's counsel specifically prayed for withdrawal of the appeals based on their coverage under these circulars.

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. 15 / 2017 THE PRINCIPAL COMMISSIONER OF INCOME TAX Vs. SHRI GURVINDAR SINGH BHATIA INCOME TAX APPEAL No. 21 / 2017 THE PRINCIPAL COMMISSIONER OF INCOME TAX Vs. SURENDRA SINGH BHATIA INCOME TAX APPEAL No. 22 / 2017 THE PRINCIPAL COMMISSIONER OF INCOME TAX Vs. GURVINDAR SINGH BHATIA INCOME TAX APPEAL No. 23 / 2017 THE PRINCIPAL COMMISSIONER OF INCOME TAX Vs. AMANDEEP SINGH BHATIA INCOME TAX APPEAL No. 24 / 2017 THE PRINCIPAL COMMISSIONER OF INCOME TAX Vs. AMANDEEP SINGH BHATIA INCOME TAX APPEAL No. 27 / 2017 THE PRINCIPAL COMMISSIONER OF INCOME TAX Vs. GURVINDAR SINGH BHATIA INCOME TAX APPEAL No. 29 / 2017 THE PRINCIPAL COMMISSIONER OF INCOME TAX Vs. AMANDEEP SINGH BHATIA INCOME TAX APPEAL No. 31 / 2017 THE PRINCIPAL COMMISSIONER OF INCOME TAX Vs. AMANDEEP SINGH BHATIA --- 2 --- * * * * * 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 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 --- 3 --- 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 16:21:27 +05'30'

Recent GST High Court judgments

Search GST case law →