PR. COMMISSIONER OF INCOME TAX vs. SOHAN RAJ BALAR

ITA/35/2026HC Rajasthan2026:RJ-JP:36682-DB05 August 2026Bench: PUSHPENDRA SINGH BHATI, PRAVEER BHATNAGAR2 pages

AI SummaryDismissed

What did the High Court hold?

The High Court held that while the case technically fell within the exception recognized under the CBDT Circulars, in view of the insignificant tax effect and the overall policy of reducing unnecessary litigation, it would be appropriate to close the present appeal. The Court explicitly stated that the appeal was dismissed without entering into the merits of the controversy. The substantial question of law proposed by the appellant was kept open and the dismissal was based solely on the aforementioned circulars and the policy of reducing litigation. The dismissal does not preclude the appellant from raising the same issue in an appropriate matter where the factual matrix or tax effect justifies judicial examination. No operative directions were issued regarding the underlying tax dispute.

What were the facts?

The appellant, Pr. Commissioner of Income Tax, Jaipur, filed an appeal before the Rajasthan High Court at Jodhpur against the respondent, Sohan Raj Balar. The appeal concerned assessment year(s) not specified in the judgment. The order or action under challenge is not explicitly stated, but it pertains to a tax effect of Rs.9,07,384/-. The appellant argued that the issue involved organized tax evasion and bogus capital gain/loss entries, falling under an exception to the CBDT's monetary limits for filing appeals. The High Court considered CBDT Circular No.09/2024 and Circular No.05/2024, which prescribe monetary limits for departmental appeals. The tax effect in this case was significantly below the Rs.2,00,00,000/- threshold for High Court appeals.

What were the issues?

1. Whether the present appeal, with a tax effect of Rs.9,07,384/-, should be entertained by the High Court despite being below the prescribed monetary limit of Rs.2,00,00,000/-, considering the appellant's contention that the issue involves organized tax evasion and bogus capital gain/loss entries, thus falling under an exception to the CBDT circulars. Assessee's Contentions: The appellant (Revenue) contended that the issue under consideration pertains to organized tax evasion and involves bogus capital gain/loss entries, and therefore, falls under exception (h) of paragraph 3.1 of CBDT Circular No.05/2024, dated 15.03.2024, justifying the appeal despite the low tax effect. Revenue's Contentions: Not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Not explicitly mentioned in the provided text, but the discussion revolves around CBDT Circulars which implement monetary limits for appeals, indirectly related to appeal provisions.

AI-generated summary — verify with the full judgment below

[2026:RJ-JP:36682-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Income Tax Appeal No. 35/2026 CNR: RJHC010230062026 | URN: ITA / 135U / 2026 Pr. Commissioner Of Income Tax, Jaipur ----Appellant Versus Sohan Raj Balar, A-75 Veer Durgadas Nagar Pali Rajasthan ----Respondent For Appellant(s) : Mr. K.K. Bissa For Respondent(s) : HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI HON'BLE MR. JUSTICE PRAVEER BHATNAGAR Order 05/08/2026 1. Learned counsel for the appellant has drawn the attention of this Court to the proposed suggested substantial question of law arising in the present appeal. 2. This Court has perused CBDT Circular No.09/2024 dated 17.09.2024, which prescribes monetary limits for filing departmental appeals before the Appellate Tribunal, High Courts, and the Hon’ble Supreme Court. 3. By the said circular, the monetary limits for filing appeals by the department have been enhanced and consequently, the monetary limit (tax effect) for filing an appeal before the Hon’ble High Court is Rs.2,00,00,000/- i.e. no appeal is to be filed before the High Court where the tax effect does not exceed Rs.2,00,00,000/-. However, exceptions to the said monetary limit have been prescribed in paragraph 3.1 of the CBDT circular No.05/2024, dated 15.03.2024. (Uploaded on 06/08/2026 at 03:38:56 PM) (Downloaded on 28/10/2026 at 12:41:09 AM)

[2026:RJ-JP:36682-DB] (2 of 2) [ITA-35/2026] 4. In the present case, the tax effect involved is Rs.9,07,384/-, which is much below the prescribed monetary threshold. However, contention of counsel for the appellant is that the issue under consideration pertains to organized tax evasion and involves bogus capital gain/loss entries, and thus, falls under the exception (h) of paragraph 3.1 of the Circular No.05/2024, dated 15.03.2024. 5. Having considered the submissions and the record, this Court is of the opinion that although the case technically falls within the exception recognized under the Circular, yet, in view of the insignificant tax effect and the overall policy of reducing unnecessary litigation, it would be appropriate to close the present appeal while keeping the substantial question of law open for consideration in a more appropriate case. 6. Accordingly, the appeal is dismissed without entering into the merits of the controversy. 7. It is clarified that the substantial question of law as proposed by the appellant is kept open and the dismissal of this appeal shall not preclude the appellant from raising the same in an appropriate matter where the factual matrix or tax effect justifies judicial examination as the merits of the case have not been considered, as the dismissal is based solely on the aforementioned circular. (PRAVEER BHATNAGAR),J (DR.PUSHPENDRA SINGH BHATI),J 2/Sudhir Choudhary Powered by TCPDF (www.tcpdf.org) (Uploaded on 06/08/2026 at 03:38:56 PM) (Downloaded on 28/10/2026 at 12:41:09 AM)

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