PRINCIPAL COMMISSIONER OF INCOME TAX 9, KOLKATA vs. RAHEE JHAJHARIA E TO E (JV)
What did the High Court hold?
The High Court decided that the appeal filed by the revenue is not maintainable due to the tax effect being below the threshold limit prescribed by the CBDT Circular. Consequently, the appeal was disposed of on this ground. The Court explicitly stated that the substantial questions of law are left open, meaning they were not adjudicated upon. No operative directions were issued regarding the merits of the case, as the appeal was dismissed on a procedural technicality. The principle established is that appeals falling below the monetary limits set by CBDT Circulars, without specific justification, may be dismissed on that ground, preserving the substantial questions of law for future consideration if raised in a case with a higher tax effect.
What were the facts?
The Principal Commissioner of Income Tax-9, Kolkata (the revenue) filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated December 16, 2022, passed by the Income Tax Appellate Tribunal, “C” - Bench, Kolkata. The appeal pertains to assessment year 2015-16 and is filed by the Department against Rahee Jhajharia E to E (JV) (the assessee). The High Court heard arguments from both sides. However, the judgment notes that the tax effect involved in the appeal is below the threshold limit stipulated in a CBDT Circular.
What were the issues?
1. Whether the appeal filed by the revenue is maintainable given the tax effect involved. The revenue, through Mr. Tilak Mitra, argued that the appeal should be heard on merits. The assessee, represented by Mr. J. P. Khaintan, argued that the appeal should be dismissed on the grounds of low tax effect, citing the CBDT Circular. The judgment does not explicitly frame the issues as questions of law or mixed law and fact, nor does it name specific provisions beyond Section 260A in relation to the appeal filing. The core of the dispute revolves around the applicability of the CBDT Circular on monetary limits for filing appeals.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
OD – 3
IN THE HIGH COURT AT CALCUTTA Special Jurisdiction [Income Tax] ORIGINAL SIDE ITA/35/2024
PRINCIPAL COMMISSIONER OF INCOME TAX-9, KOLKATA VS. RAHEE JHAJHARIA E TO E (JV)
BEFORE : THE HON’BLE THE CHIEF JUSTICE T.S. SIVAGNANAM AND THE HON’BLE JUSTICE CHAITALI CHATTERJEE (DAS) Dated : 31ST July, 2025
Appearance :
Mr. Tilak Mitra, Adv.(VC) Mr. Prithu Dudhoria, Adv. …for Appellant Mr.J.P. Khaitan, Sr. Adv. Mr. Pratyush Jhunjhunwala, Adv. Mr. Mrigank Kejriwal, Adv. Ms. Sruti Dutta, Adv. Ms. Sakshi Singhi, Adv. ..for the Respondent
The Court : We have heard Mr. Tilak Mitra, learned Senior Standing Counsel appearing for the appellant/revenue and Mr. J. P. Khaintan, learned Senior Advocate appearing for the assessee/respondent. This appeal filed by the Department under Section 260A of the Income Tax Act, 1961 is directed against the order dated December 16, 2022 passed by the Income Tax
Appellate Tribunal, “C” - Bench, Kolkata in ITA No.135/Kol/2021 for the assessment year 2015-16. As the tax effect involved in this appeal is less than the threshold limit mentioned in the Circular issued by CBDT, the revenue cannot pursue this appeal any further. Accordingly, the appeal stands disposed of on the ground of low tax effect and the substantial questions of law are left open.
(T.S. SIVAGNANAM, CJ.)
(CHAITALI CHATTERJEE (DAS), J.)
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