Principal Commissioner Of Income Tax I vs. M/S Nishit Contruction Co.Pvt. Ltd.

ITA/79/2017HC 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 The appeal was dismissed as withdrawn. However, the High Court explicitly stated that the question of law is left open. This means that while the appeal was disposed of on procedural grounds (withdrawal), the underlying legal issue was not decided on its merits by the High Court. The reasoning for allowing the withdrawal was based on the appellant's submission that the appeal was covered under the circulars issued by the Department, implying that the appeal might not have met the monetary limits for filing or was otherwise deemed not to be pursued on merits as per departmental policy at that time. The operative direction was the dismissal of the appeal as withdrawn, with the question of law remaining undecided.

What were the facts?

The Commissioner of Income Tax, Indore, 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 circulars (No. 3/2018 dated 11/07/2018 and revised on 20/08/2018, and further circulars on 08/08/2019 and 06/09/2019) specifying monetary limits for filing appeals. The learned counsel for the appellant (Commissioner of Income Tax) prayed for the withdrawal of the present appeal, stating it was covered under the departmental circulars. The High Court allowed this prayer.

What were the issues?

1. Whether the appeal filed by the Commissioner of Income Tax is maintainable in light of the monetary limits prescribed by CBDT circulars for filing appeals before the High Court, or if it falls under any exceptions allowing contestation on merits irrespective of tax effect? The assessee is M/s. Nishit Construction Co Pvt Ltd. The revenue is the Commissioner of Income Tax. The assessment year(s) are not specified. The order under challenge is an order passed by the Income Tax Appellate Tribunal. The appeal is filed under Section 260A of the Income Tax Act, 1961. Contentions: Assessee: No specific contentions are recorded for the assessee as the appeal was withdrawn by the revenue. Revenue: The learned counsel for the appellant (Commissioner of Income Tax) prayed for the withdrawal of the present appeal, stating that the appeal is covered under the circulars issued by the Department. The judgment does not explicitly state the revenue's argument regarding the maintainability of the appeal on merits, but rather their request to withdraw it based on departmental circulars.

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 / 2013 THE COMMISSIONER OF INCOME TAX Vs. M/S. NISHIT CONSTRUCTION CO PVT LTD. INCOME TAX APPEAL No. 79 / 2017 THE COMMISSIONER OF INCOME TAX Vs. M/S. NISHIT CONSTRUCTION CO 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 --- 2 --- 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 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 13:57:00 +05'30'

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