THE PRINCIPAL COMMISSINER OF INCOME TAX vs. PINKCITY JEWELHOUSE PVT. LTD.

[2025:RJ-JP:7837-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 8/2025 The Principal Commissioner Of Income Tax, (Central), Rajasthan, Room No. 402, 4Th Floor, Lic Building, Bhawani Singh Road, Ambedkar Circle, Jaipur-302005. ----Appellant Versus Pinkcity Jewelhouse Pvt. Ltd., 76, Dhuleshwar Gardens, Jaipur(Pan/gir No.-Aaacf8368D). ----Respondent For Appellant(s) : Mr.Siddharth Bapna with Mr.Meyhul Miittal HON'BLE MR. JUSTICE AVNEESH JHINGAN HON'BLE MR. JUSTICE ASHUTOSH KUMAR Order 21/02/2025 1. This appeal under Section 260A of the Income Tax Act, 1961 (for short the Act) is filed against the order of the Income Tax Appellate Tribunal, Jaipur (for short the Tribunal) dated 7.3.2024. 2. The brief facts are that the respondent-company on 05.08.2016 was assessed under Section 143(1) of the Act for assessment year 2015-16. On the basis of survey conducted on the premise of the respondent, re-assessment proceedings were initiated. The proceedings culminated in reassessment order dated 17.12.2018 and assessing officer (for brevity ‘AO’) disallowed deduction under Section 10AA of the Act. On 25.02.2019, re- assessment order was rectified. The revisional authority vide order dated 17.3.2021 set aside the assessment and rectification orders and the matter was remanded to pass assessment afresh after

[2025:RJ-JP:7837-DB] (2 of 3) [ITA-8/2025] recording findings with regard to eligibility of the respondent to claim exemption under Section 10AA of the Act. The respondent succeeded before the tribunal, the revision order was set aside. Hence, the present appeal. 3. Learned counsel for the respondent raises objection with regard to maintainability of the appeal in view of Circular 9 dated 17.9.2024. The argument is that the only dispute is with regard to deduction claimed under section 10AA and in case the department succeeds and entire deduction is disallowed, the tax effect would be less than two crores. 4. Learned counsel for the appellant submits that Circular 9 retains the exceptions provided in Circular 5 dated 15.03.2024. The argument is that this appeal falls within the exception in Clause F of para 3.1 of Circular 5 of 2024. The appeal is maintainable as the order is passed under Section 263 of the Act and the tax effect is not quantified. Learned counsel for the appellant on instructions fairly submits that even if the entire deduction is disallowed the tax effect would be Rs.1,32,00,000/-. Clause F of para 3.1 of the Circular 5 reads as under:- “f. where the tax effect is not quantifiable or not involved, such as the case of registration of trust or institutions under sections 10(23C), 12A/12AA/12AB of the Act, order passed u/s 263 of the Act, etc. The reference to the cases involving sections referred here, where it is not possible to quantify tax effect or tax effect is not involved, is for the purpose of illustration only.” 5. The contention of the counsel for the appellant lacks merit. There is a distinction between ‘tax not quantifiable’ and ‘tax not

[2025:RJ-JP:7837-DB] (3 of 3) [ITA-8/2025] quantified’. The exception is for order passed under Section 263 of the Act where the tax effect is not quantifiable. Taking the case of the department at the highest and even if order of the revisional authority is upheld, the tax effect would be less than two crores. 6. The demand might not have been quantified but remand was with regard to deduction claimed under Section 10AA and the maximum tax effect can be quantified at this stage, which would be less than two crores. 8. In view of the above, the appeal is dismissed as not maintainable in view of Circular 9 dated 17.9.2024. The proposed substantial question of law is kept open. (ASHUTOSH KUMAR),J (AVNEESH JHINGAN),J Brijesh Whether reportable: Yes