The Pr. Commissioner Of Income Tax 1 vs. Shri Subhash Mukati

ITA/77/2022HC Madhya Pradesh11 February 2025Bench: HON'BLE SHRI JUSTICE SUSHRUT ARVIND DHARMADHIKARI2 pages

For Petitioner: Veena Mandlik

AI SummaryDismissed

What did the High Court hold?

The High Court held that the appeal filed by the Revenue is not maintainable. The Court observed that CBDT Circular No. 5/2024 dated 15/03/2024, which was later amended by Circular No. 9/2024 dated 17/09/2024, supersedes the earlier circulars dated 11/07/2018 and 08/08/2019. Crucially, the Court noted that the latest circular does not provide for an exception clause (like 10(C)) that would permit filing an appeal despite the tax effect being less than the monetary limits. Therefore, based on the prevailing circulars, the appeal could not be entertained. The appeal was accordingly dismissed. However, the Court clarified that the question of law raised in the appeal shall remain open, and the appellant (Revenue) is at liberty to file an application if the cause of action survives as per law.

What were the facts?

The Principal Commissioner of Income Tax (Revenue) filed an appeal under Section 260A of the Income Tax Act, 1961, against an order passed by the Income Tax Appellate Tribunal (ITAT), Indore. The appeal was preferred against ITA No. 425/IND/2018 dated 28/06/2021. The sole controversy revolved around the entertainability of the Revenue's appeal before the High Court under exception Clause 10(C) of CBDT Circular No. 3/2018 dated 11/07/2018. The tax effect involved in the case was Rs. 31,72,000, which was below the monetary limits specified in subsequent CBDT Circulars No. 17/2019 dated 08/08/2019 and No. 5/2024 dated 15/03/2024. The respondent, Shri Subhash Mukati, was not represented before the High Court.

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, notwithstanding that the tax effect involved (Rs. 31,72,000) is below the monetary limits prescribed by subsequent CBDT Circulars. Assessee's Contentions: The judgment does not record any specific contentions made by the assessee (respondent) as none appeared. However, the appeal is filed by the Revenue, and the issue is about its maintainability. Revenue's Contentions: The Revenue contended that the appeal should be entertained under exception Clause 10(C) of CBDT Circular No. 3/2018. The Revenue implicitly argued that the exception clause allows filing appeals even if the tax effect is below the prescribed limits, provided the conditions of the exception are met. The Revenue relied on CBDT Circular No. 3/2018.

Which sections of the Income-tax Act were involved?

Section 260A

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 11th OF FEBRUARY, 2025 INCOME TAX APPEAL No. 77 of 2022 THE PR. COMMISSIONER OF INCOME TAX 1 Versus SHRI SUBHASH MUKATI Appearance: Shri Harsh Parashar - senior standing counsel with Shri Shantanu Sharma - counsel for the appellant. None for the respondent. 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.425/IND/2018 dated 28/06/2021. 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.31,72,000/-, 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-77-2022 NEUTRAL CITATION NO. 2025:MPHC-IND:3566 Signed by: HEMANT SARAF Signing time: 20-02-2025 12:47:52 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 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 question of law raised in this appeal shall remain open and the appellant would be at liberty to file application, in case cause of action survives as per law. HS

2 ITA-77-2022 NEUTRAL CITATION NO. 2025:MPHC-IND:3566 Signed by: HEMANT SARAF Signing time: 20-02-2025 12:47:52 Signature Not Verified

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