PR. COMMISSIONER OF INCOME TAX vs. KALAWATI DEVI

ITA/37/2026HC Rajasthan2026:RJ-JD:44839-DB17 September 2026Bench: SANJAY K. AGRAWAL, VINIT KUMAR MATHUR2 pages

AI SummaryDismissed

What did the High Court hold?

The High Court held that while the case technically falls within the exception recognized under the CBDT Circulars (specifically relating to organized tax evasion), the insignificant tax effect of Rs. 8,96,687/- and the overall policy of reducing unnecessary litigation warrant closing the present appeal. The Court decided to dismiss the appeal without entering into the merits of the controversy. The substantial question of law proposed by the appellant was kept open for consideration in a more appropriate case where the factual matrix or tax effect justifies judicial examination. The dismissal is based solely on the aforementioned circular and the policy of reducing litigation, not on the merits of the case.

What were the facts?

The appellant, Pr. Commissioner of Income Tax, Tax-Central, Jaipur, filed an appeal before the Rajasthan High Court at Jodhpur against an order concerning the respondent, Kalawati Devi. The assessment year(s) are not specified. The appeal challenges the decision of a lower authority, though the specific order and authority are not detailed. The amount in dispute, referred to as the tax effect, is Rs. 8,96,687/-. The procedural history involves the appellant's counsel drawing attention to a proposed substantial question of law and perusing CBDT Circular No. 09/2024, which enhances monetary limits for departmental appeals. The appellant contended that despite the low tax effect, the case falls under an exception related to organized tax evasion.

What were the issues?

1. Whether the appeal, with a tax effect of Rs. 8,96,687/-, should be entertained by the High Court despite being below the prescribed monetary limit of Rs. 2,00,00,000/- for appeals before the High Court, as per CBDT Circular No. 09/2024. Assessee's contention (Appellant): The appellant argued that the issue involves organized tax evasion and bogus capital gain/loss entries, thus falling 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 contention: No specific contentions were recorded for the revenue in the judgment.

Which sections of the Income-tax Act were involved?

Not specified

AI-generated summary — verify with the full judgment below

[2026:RJ-JD:44839-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Income Tax Appeal No. 37/2026 CNR: RJHC010230222026 | URN: ITA / 138U / 2026 Pr. Commissioner Of Income Tax, Tax-Central, Jaipur ----Appellant Versus Kalawati Devi, E-89, Industrial Area, Pali, Rajasthan ----Respondent For Appellant(s) : Mr. Kamal Kishore Bissa For Respondent(s) : - HON'BLE THE CHIEF JUSTICE MR. SANJAY K. AGRAWAL HON'BLE MR. JUSTICE VINIT KUMAR MATHUR Order 17/09/2026 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 18/09/2026 at 03:50:24 PM) (Downloaded on 28/10/2026 at 12:42:12 AM)

[2026:RJ-JD:44839-DB] (2 of 2) [ITA-37/2026] 4. In the present case, the tax effect involved is Rs.8,96,687/-, 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 being Rs. 8,96,687/- 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. (VINIT KUMAR MATHUR),J (SANJAY K. AGRAWAL),CJ 8/Divya Prajapat Powered by TCPDF (www.tcpdf.org) (Uploaded on 18/09/2026 at 03:50:24 PM) (Downloaded on 28/10/2026 at 12:42:12 AM)

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