THE COMMISSIONER OF INCOME TAX-III vs. M/S.VBC FERRO ALLOYS LTD

ITTA/381/2010HC TelanganaHBHC01069490201010 February 2025Bench: P.SAM KOSHY,NARSING RAO NANDIKONDA4 pages

AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal filed by the Revenue. The primary reason for dismissal was that the tax effect in the instant appeal was well below the monetary limit of Rs. 2.00 crore for filing appeals before the High Court, as stipulated by CBDT Circular No. 9 of 2024 (amending Circular No. 5 of 2024). The Court noted that this circular was issued as a measure for reducing litigation. The Court also stated that if the appeal fell within any exception provided in Circular No. 5 of 2024, it would be open for the Income Tax Department to seek revival of the appeal. No order as to costs was made. The ratio decidendi is that appeals filed by the Revenue that do not meet the prescribed monetary limits are liable to be dismissed, unless they fall under specific exceptions.

What were the facts?

The Revenue, Commissioner of Income Tax-III, Hyderabad, filed an appeal under Section 260(4) of the Income Tax Act, 1961, before the High Court for the State of Telangana at Hyderabad. The appeal challenged an order dated 31.07.2008 passed by the Income Tax Appellate Tribunal (ITAT), Hyderabad Bench 'B', in ITA No. 1001/Hyd/2008 for Assessment Year 2002-2003. This ITAT order was preferred against an order dated 27.03.2008 passed by the Commissioner of Income Tax (Appeals)-IV, Hyderabad, which in turn was against an Assessment Order dated 24.12.2007 passed by the Deputy Commissioner of Income Tax, Circle 3(3), Hyderabad. The assessee is M/s. VBC Ferro Alloys Ltd. The tax effect in the instant appeal was stated to be well below the monetary limit for filing appeals.

What were the issues?

1. Whether the appeal filed by the Revenue is maintainable before the High Court, considering the monetary limits prescribed by CBDT Circulars for filing appeals. (Question of law) Assessee's Contention: The judgment does not record any specific contentions from the assessee regarding the merits of the case. The appeal was dismissed based on the tax effect and CBDT circulars. Revenue's Contention: The Revenue, as the appellant, filed the appeal. Their implicit contention was that the appeal should be heard on merits. However, the judgment focuses on the procedural aspect of monetary limits. The Revenue relied on the fact that they filed the appeal, but no specific legal arguments were recorded in their favor regarding the maintainability or merits.

Which sections of the Income-tax Act were involved?

Section 260(4)

AI-generated summary — verify with the full judgment below

I 13447 | IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD MONDAY, THE TENTH DAY OF FEBRUARY TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE P.SAM KOSHY THE HONOURABLE SRI JUSTICE NARSING RAO NANDIKONDA INCOME TAX TRIBUNAL APPEAL NO: 381 OF 2010 Appeal filed under Section 260(4) of the lncome-Tax Act., 1961, against the orderdated 31-07.2008 passedinlTA.No. 1001iHydl2000fortheassessmentyear 2002-2003 on the file of the Court of the lncome Tax Appellate Tribunal Hyderabad Bench 'B' preferred against the Order dated: 27.O3.2008 passed in lTA.No. 439/DC- 3(3)/C|T(A)-|V/07-OB A.Y 2002-2003 on the frle of the Court of the Commissioner of lncome Tax (Appeals)-lV, Hyderabad preferred against the Assessment Order dated.24.12.2007 passed in PAN/GIR No AAACV7258A on the file of the Court of the lncome Tax Department, Deputy Commissioner of lncome Tax, Circle3(3), Hyderabad. Between: The Commissioner of lncome Tax-lll, lT Towers, Masabtank, Hyderabad ...APPELLANT AND M/s. VBC Ferro Alloys Ltd, 6-2-913/914, 3'd Floor, Progressive Towers, Khairtabad, Hyderabad. ...RESPONDENT Counsel for the.Appellants: Sri J.V. Prasad, Standing Counsel for lncome Tax Counsel for the Respondents: Challa Nagendra Prasad The Court delivered the following JUDGMENT:

THE HoNOURABT,E SRI JUSTICE P.SAI\I KOSHY AND THE HoNOURABLE SRI JUSTICE NARSING RAO NANDIKONDA ITTA No.381 OF 20r0 JTJDGMENl' fiter Hon'hle Sri .Iu:stice P.Sam Koshy) Heard Ms. B.Sapna Reddy, leamed Junior Standing Counsel reprcsenting Mr. J.V.Prasad, learned Senior Standing Counsel fbl llrc Income Tax Department for the appellant. Perused the record 2. This appeal undcr Section 260,4 of the Incorne l'ax Act. I 961, has l.,een prelerred by the Revenue as the appellant against thc order datcd 31.07.2008 passed by the Income 'I-ax Appcllatc' Ilibunal, llyderabad Bench 'B', ]lydcrabad, IN 1.1'.A.No. 100 l/tJyd/2008 firr the Assessment Year 2002-03 3. Central lloard ol Direct Taxes (CBDT) has issucd Circular No.9 of 2024 dated 17.09.2024, amending the previous Circular No.5 of 2024 dated 15.03.2024, by further enhancing the monetarl' limits fol frling appeals by the Income Tax Departrnent before thc I I Income Tax r\ppellate 1'ribunals, High Courts and Supreme Court I I

z a as a lneasure for reducing litigation' In paragraph 2 of the said Circular. we find that the monetary limit fixed for filing an appeal before the High Court is Rs'2'00 crore' 1. In the instant appeal, tax effect is well below the monetary lirnit. 5. Therefore, the appeal filed by the Department is dismissed in tems of the aforesaid Circular No'9 of 2024 dated 17 '09'2024' I{owever,'it the appeal comes within the exception of Circular No.5 oi 2024, it would be open to the lncome Tax Departrnent to seek revival ofthe appeal' There shall be no order as to costs' 6, Consequently, miscellaneous petitions pending' if any' shall stand closed. Sd,. K. SRINIVASA RAO INT REGISTRAR //TRUE COPY/' ECTION OFFICER 1 2 3 4. 5 b. Vtl/gh To, il: s,:"ffi+Eii sfl :;: # :#l#flffitt H[{r?l:r "' Effi itiiEii[x],:'ffi gbl',","'r,['rJ:iJ"*#?331q lncome Tax, +p iwo CD CoPies

HIGH COURT DATED: 1010212025 JUDGMENT ITTA.No.381 of 2010 DISMISSING THE ITTA Q6 j ,,i I[ 2 B til\i\ ?[25 o al * t DssP,rr B I I I j I

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