Pr. Commissioner Of Income Tax 1 vs. Shivani Logistics

ITA/83/2023HC 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 was not maintainable. The Court reasoned that CBDT Circular No. 9/2024, dated 17/09/2024, which superseded Circular No. 3/2018 and Circular No. 17/2019, did not provide for an exception clause (like 10(C)) that would allow an appeal to be filed notwithstanding that the tax effect entailed was less than the specified monetary limits. The ratio decidendi is that subsequent superseding circulars, if they omit specific exceptions present in earlier ones, render those exceptions inoperative. Therefore, the appeal, which relied on an exception no longer available in the prevailing circular, was dismissed. However, the question of law raised in the appeal was left open, and 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 (the appellant/Revenue) filed an appeal under Section 260A of the Income Tax Act, 1961, against an order of the Income Tax Appellate Tribunal, Indore. The appeal was preferred by the Revenue against Shivani Logistics (the respondent/assessee). The core issue revolved around the entertainability of the appeal before the High Court under Exception Clause 10(C) of CBDT Circular No. 3/2018. The tax effect involved was admittedly below Rs. 2 Crores, falling 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 The High Court noted that the latest circular, No. 9/2024 (amending Circular No. 5/2024), superseded earlier circulars and did not provide for an exception clause allowing appeals despite the tax effect being below monetary limits.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 is below the monetary limit specified in subsequent CBDT Circulars? Assessee's Contentions: Not recorded as the respondent was not present. Revenue's Contentions: The Revenue contended that the appeal was entertainable under Exception Clause 10(C) of CBDT Circular No. 3/2018. The Revenue relied on CBDT Circular No. 3/2018, Circular No. 17/2019, and Circular No. 5/2024. The Revenue argued that despite the tax effect being below the monetary limit, an exception clause existed for filing the appeal.

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. 83 of 2023 PR. COMMISSIONER OF INCOME TAX 1 Versus SHIVANI LOGISTICS 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.263/IND/2021 dated 1/06/2022. 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 below Rs.2 Cr., 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-83-2023 NEUTRAL CITATION NO. 2025:MPHC-IND:3588 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-83-2023 NEUTRAL CITATION NO. 2025:MPHC-IND:3588 Signed by: HEMANT SARAF Signing time: 20-02-2025 12:47:52 Signature Not Verified

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