Principal Commissioner Of Income Tax vs. Shri Manibhadra Builders And Developers

ITA/19/2018HC Madhya Pradesh31 October 2019Bench: HON'BLE SHRI JUSTICE S.C.SHARMA2 pages

For Petitioner: Veena Mandlik

AI SummaryWithdrawn

What did the High Court hold?

The High Court allowed the prayer for withdrawal of the appeal. The Court noted that the present appeal was covered under the circulars issued by the Department regarding monetary limits for filing appeals. Consequently, the appeal was dismissed as withdrawn. However, the High Court explicitly stated that the question of law was left open. This implies that the merits of the case were not adjudicated upon, and the dismissal was purely procedural due to the withdrawal by the Revenue. The ratio decidendi is that an appeal can be withdrawn by the appellant if it is found to be covered by departmental circulars, and such withdrawal does not preclude the question of law from being raised in future proceedings if circumstances permit.

What were the facts?

The Principal Commissioner of Income Tax, Indore, filed two appeals (Income Tax Appeal Nos. 19/2018 and 21/2018) before the High Court of Madhya Pradesh, Bench at Indore, against an order passed by the Income Tax Appellate Tribunal. The appeals were filed under Section 260A of the Income Tax Act, 1961. The judgment discusses various circulars issued by the Central Board of Direct Taxes (CBDT) regarding monetary limits for filing appeals before High Courts and the Supreme Court, specifically mentioning Circular No. 3/2018 (amended on 20/08/2018), a circular dated 08/08/2019 enhancing the limit to Rs. 1.00 crore, and a clarificatory circular dated 6th September, 2019, permitting appeals irrespective of valuation in cases of organized tax evasion. The appellant (Revenue) stated that the present appeal was covered under these circulars and prayed for withdrawal.

What were the issues?

1. Whether the present appeal is covered by the monetary limits specified in the CBDT circulars for filing appeals before the High Court, or if it falls under the exceptions allowing appeals on merits irrespective of tax effect. The Revenue argued that the present appeal was covered under the circulars issued by the Department and therefore prayed for withdrawal. The judgment does not record any specific arguments from the assessee, Shri Manibhadra Builders and Developers, on the merits of the case or on the applicability of the circulars. The High Court's decision was based on the Revenue's prayer for withdrawal.

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. 19 / 2018 THE PRINCIPAL COMMISSIONER OF INCOME TAX Vs. SHRI MANIBHADRA BUILDERS AND DEVELOPERS INCOME TAX APPEAL No. 21 / 2018 THE PRINCIPAL COMMISSIONER OF INCOME TAX Vs. SHRI MANIBHADRA BUILDERS AND DEVELOPERS * * * * * 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 : --- 2 --- 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). 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 16:51:07 +05'30'

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