LATE GYAN CHAND JAIN THR LR. MANISH KUMAR JAIN vs. COMMISSIONER OF INCOME TAX I

[NON­REPORTABLE] IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.2704 OF 2022 Late Shri Gyan Chand Jain through LR …Appellant Versus Commissioner of Income Tax­I …Respondent J U D G M E N T M.R. SHAH, J. 1. Feeling aggrieved and dissatisfied with the impugned judgment and order dated 29.03.2016 passed by the High Court of Judicature for Rajasthan, Jaipur in D.B. Income Tax Appeal No.33 of 2014 by which the High Court has allowed the said appeal preferred by the Revenue and has 1 Digitally signed by DEEPAK SINGH Date: 2022.04.19 17:38:17 IST Reason: Signature Not Verified

set   aside   the   order   passed   by   the   Income   Tax   Appellate Tribunal (hereinafter referred to as the ‘ITAT’) deleting the penalty under Section 271(1)(c) of the Income Tax Act (for short   ‘the   Act’),   the   assessee   has   preferred   the   present appeal. 2. It is mainly submitted on behalf of the appellant that in view of the CBDT (Central Board of Direct Taxes) Circular No.21 of 2015 dated 10.12.2015 the appeal preferred by the Revenue was not maintainable.  It is the case on behalf of the appellant that in view of the aforesaid circular no appeal can be filed by the Department in any High Court, for non­ payment   of   taxes,   where   the   tax   effect   is   less   than Rs.20,00,000/­.   It is the case on behalf of the appellant that in view of the order passed by the CIT(A) and in view of the subsequent demand, the penalty amount was reduced to Rs.6,00,000/­ (approximately) and therefore when the tax effect   would   be   less   than   Rs.20,00,000/­,   in   view   of   the 2

CBDT Circular dated 10.12.2015 the appeal preferred by the Revenue before the High Court was not maintainable.

2.1 Learned counsel appearing on behalf of the appellant has   also   made   some   submissions   on   merits   on   the jurisdiction of the Additional Commissioner of Income Tax. However   considering   the   definitions   contained   in   Section 2(28C) read with Section 274(2) of the Income Tax Act, ‘Joint Commissioner’   means   a   person   appointed   to   the   post   of Joint Commissioner of Income Tax and includes Additional Commissioner of Income Tax and in the present case the approval of the Additional Commissioner of Income Tax was obtained, we see no reason to interfere with the findings recorded by the High Court on merits on the powers of the Additional Commissioner to grant the approval sought by the AO for imposing penalty under Section 271(1)(c) of the Income Tax Act. 3

2.2 Now so far as the primary submission on behalf of the appellant   assessee   that   as   the   penalty   amount   was substantially   reduced   to   Rs.6   lakhs   and   even   the subsequent demand notice was for an amount of Rs.6 lakhs (approximately)   only   and   therefore   in   view   of   the   CBDT Circular dated 10.12.2015 the tax effect being lower than the permissible limit to prefer the appeal before the High Court and therefore the appeal before the High Court was not maintainable is concerned, at the outset it is required to be noted that what was assailed by the Revenue was the penalty amounting to Rs.29,02,743/­ and not the penalty reduced   by   the   CIT(A).     Before   the   Tribunal,   both   the Revenue, as well as the assessee, preferred the appeals and the   entire   penalty   amounting   to   Rs.29,02,743/­   was   an issue before the Tribunal as well as before the High Court. The   subsequent   reduction   in   penalty   in   view   of   the subsequent   order   cannot   oust   the   jurisdiction.     What   is required   to   be   considered   is   what   was   under   challenge before the Tribunal as well as the High Court.  At the cost of 4

repetition, it is observed that what was challenged by  the Revenue was the penalty amounting to Rs.29,02,743/­ and not the subsequent reduction of penalty by the CIT(A).  The aforesaid aspect has been dealt with by the High Court in paragraph 17 of the impugned judgment and order.  We are in   complete   agreement   with   the   view   taken   by   the   High Court.   Therefore, it cannot be said that the appeal before the High Court at the instance of the Revenue challenging the order passed by the ITAT was not maintainable in view of CBDT circular dated 10.12.2015. 4. In view of the above and for the reasons stated above there is no substance in the present appeal and the same deserves to be dismissed and is accordingly dismissed.  No costs. ...…………………………….J. [M.R. SHAH] 5

………………………………J. [B.V. NAGARATHNA] NEW DELHI; APRIL 19, 2022