The C.I.T. Ii Indore vs. M/S Winner Technology P.Ltd.

ITA/34/2005HC Madhya Pradesh31 October 2019Bench: HON'BLE SHRI JUSTICE S.C.SHARMA2 pages

For Petitioner: V.Mandlik /

AI SummaryWithdrawn

What did the High Court hold?

The High Court allowed the Revenue's prayer for withdrawal of the appeal. The reasoning was based on the applicability of the circulars issued by the Department concerning monetary limits for filing appeals. The Revenue's counsel stated that the present appeal was covered under these circulars and sought permission to withdraw it. The Court granted this prayer, dismissing the appeal as withdrawn. However, the Court explicitly stated that the question of law was left open. The ratio decidendi is that appeals can be withdrawn by the appellant if they are found to be covered by departmental circulars or if the appellant chooses not to press the appeal, with the caveat that the underlying question of law remains undecided.

What were the facts?

The Commissioner of Income Tax, Indore (Revenue) filed an appeal under Section 260A of the Income Tax Act, 1961, before the High Court of Madhya Pradesh, Bench at Indore, against an order passed by the Income Tax Appellate Tribunal. The appeal was filed against M/s. Winner Technology Pvt Ltd. (Assessee). 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, and exceptions where appeals should be contested on merits regardless of tax effect. The Revenue's counsel ultimately 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 amendments, and if not, whether it falls under any of the exceptions allowing appeals on merits irrespective of tax effect? The Revenue argued that the appeal was filed under Section 260A of the Income Tax Act, 1961. The judgment extensively quotes CBDT Circular No. 3/2018 and its subsequent amendments, detailing the monetary limits for filing appeals and specific categories of cases that must be contested on merits, such as those involving constitutional validity, illegal Board orders, revenue audit objections, undisclosed foreign assets, information from external agencies, and pending prosecution. The Revenue's counsel ultimately prayed for the withdrawal of the appeal, indicating that the appeal was covered under the circulars and the prayer was allowed.

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. 34 / 2005 THE COMMISSIONER OF INCOME TAX Vs. M/S. WINNER TECHNOLOGY PVT 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 12:54:46 +05'30'

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