The Pr. Commissioner Of Income Tax 1 vs. Madhya Pradesh Financial Corporation
What did the High Court hold?
The High Court held that the appeal filed by the Revenue was not maintainable. The Court observed that the tax effect involved in the case was Rs. 1,07,92,000/-, which was below the monetary limits stipulated in CBDT Circular No. 17/2019 and CBDT Circular No. 5/2024. Crucially, the Court noted that the subsequent CBDT Circular No. 9/2024 dated 17.09.2024, which superseded the earlier circulars, did not contain an exception clause similar to 10(C) of CBDT Circular No. 3/2018. This exception clause was the basis for the Revenue's argument for entertainability. Since the latest applicable circular did not provide for such an exception, the appeal could not be entertained. The Court accordingly dismissed the appeal. However, the appellant was granted liberty to file an application if the cause of action survived as per law.
What were the facts?
The Principal Commissioner of Income Tax-1 (the appellant/Revenue) filed an appeal under Section 260A of the Income Tax Act, 1961, against an order passed by the Income Tax Appellate Tribunal, Indore, dated 23.08.2021. The appeal concerns the entertainability of the Revenue's appeal before the High Court under exception Clause 10(C) of CBDT Circular No. 3/2018. The tax effect involved in the case was Rs. 1,07,92,000/-, which was below the monetary limits specified in subsequent CBDT Circulars No. 17/2019 and 5/2024. The High Court noted that the latest circular, No. 9/2024 dated 17.09.2024, superseding earlier ones, did not provide an exception clause for filing appeals despite the tax effect being below monetary limits.
What were the issues?
1. Whether the appeal filed by the Revenue is maintainable before this Court under exception Clause 10(C) of CBDT Circular No. 3/2018, given that the tax effect involved is Rs. 1,07,92,000/-, which is below the monetary limits specified in CBDT Circulars No. 17/2019 and 5/2024? Assessee (Revenue) Contentions: The Revenue argued that the appeal should be entertained under exception Clause 10(C) of CBDT Circular No. 3/2018, which allows appeals irrespective of the tax effect in certain circumstances. They relied on the existence of this exception clause in the circular applicable at the time of filing. Revenue Contentions: The Revenue contended that the appeal was maintainable. They relied on CBDT Circular No. 3/2018, specifically exception Clause 10(C), which permitted appeals in certain cases even if the tax effect was below the prescribed monetary limits. They also referred to subsequent circulars, including CBDT Circular No. 9/2024, which superseded earlier ones.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
IN THE HIGH COURT OF MADHYA PRADESH AT INDORE BEFORE HON'BLE SHRI JUSTICE SUSHRUT ARVIND DHARMADHIKARI & HON'BLE SHRI JUSTICE GAJENDRA SINGH ON THE 5th OF FEBRUARY, 2025 INCOME TAX APPEAL No. 66 of 2022 THE PR. COMMISSIONER OF INCOME TAX- 1 Versus MADHYA PRADESH FINANCIAL CORPORATION Appearance: Shri Harsh Parashar, learned Senior Standing Counsel for the appellant. ORDER Per: Justice Sushrut Arvind Dharmadhikari The instant appeal under Section 260(A) of the Income Tax Act, 1961 has been preferred by the appellant being aggrieved by the order passed by learned Income Tax Appellate Tribunal, Indore, in ITA No.192/IND/2020 dated 23.08.2021. The only controversy seems to be involved in the case as to whether the appeal filed by the Revenue would be entertainable before this Court under exception Clause 10(C) of CBDT Circular No.3/2018 dated 11/07/2018. Admittedly, the tax effect involved in the case is Rs.1,07,92,000/-, which is below the monetary limit as specified in the Circular No. 17/2019 dated 08/08/2019 and CBDT Circular No. 5/2024 dated 15/03/2024. 1 ITA-66-2022 NEUTRAL CITATION NO. 2025:MPHC-IND:2986 Signed by: VARSHA SINGH Signing time: 06-02-2025 10:15:18 Signature Not Verified
(SUSHRUT ARVIND DHARMADHIKARI) JUDGE (GAJENDRA SINGH) JUDGE On perusal of the Circular dated 15/03/2024, which was later on, amended by Circular No. 9/2024 dated 17/09/2024 issued by CBDT supersedes the Circular dated 11/07/2018 and 08/08/2019, it is seen that it does not provide exception clause i.e. 10(C), wherein the appeal can be filed notwithstanding the fact that the tax effect entailed is less than the monetary limits under the exceptions given. In view of above, the appeal is not maintainable. Accordingly, same is hereby dismissed. However, the appellant would be at liberty to file application, in case cause of action survives as per law. VS
2 ITA-66-2022 NEUTRAL CITATION NO. 2025:MPHC-IND:2986 Signed by: VARSHA SINGH Signing time: 06-02-2025 10:15:18 Signature Not Verified
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