The Commissioner Of Income Tax vs. Shrichand Valecha

ITA/23/2012HC Madhya Pradesh31 October 2019Bench: HON'BLE SHRI JUSTICE S.C.SHARMA2 pages

For Petitioner: Ku.Veena MandlikFor Respondent: Sumit Nema, Mukesh Agrawal, Vibhash Khedekar

AI SummaryWithdrawn

What did the High Court hold?

The Tribunal noted that the present appeal was covered under the circulars issued by the Department regarding the monetary limits for filing appeals. The learned counsel for the appellant (Revenue) prayed for the withdrawal of the appeal. The prayer was allowed, and the appeal was dismissed as withdrawn. However, the question of law was expressly left open.

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 Central Board of Direct Taxes (CBDT) had issued Circular No. 3/2018, subsequently revised, which stipulated 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 Revenue's counsel, citing these circulars, prayed for the withdrawal of the present appeal.

What were the issues?

1. Whether the present appeal, filed by the Revenue, is maintainable in light of the monetary limits prescribed by CBDT Circular No. 3/2018 and its subsequent revisions. The Revenue argued that the appeal falls under the categories permitted to be contested on merits, irrespective of the tax effect, as per the circulars. The assessee's arguments are not recorded in the judgment.

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. 23 / 2012 THE COMMISSIONER OF INCOME TAX Vs. SHRICHAND VALECHA * * * * * 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 13:49:02 +05'30'

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