Chhattisgarh High Court Judgments — 2025

The High Court held that Section 206C(1C) of the Income Tax Act, 1961, obliges the assessee to collect tax at source from persons to whom rights have been conferred and from whom royalty is payable to the State Government. The obligation to collect tax under this section cannot be extended to persons involved in illegal mining or transportation of illegal minerals. The section specifically mandates collection from leaseholders, license holders, or those with whom a contract or transfer of rights in a mine or quarry has been made. There is no legislative mandate to collect TCS from persons involved in illegal mining or transportation. Furthermore, compounding fees/fines collected under Section 23A of the MMDR Act read with Rule 71(5) of the Rules of 2015 have the effect of an acquittal, meaning no further proceedings can be taken. Therefore, compounding fees/fines cannot be subjected to TCS under Section 206C(1C) as there is no legislative command for it. The royalty and compounding fee are mutually exclusive. The ITAT was unjustified in holding that compounding fees/fines are chargeable under Section 206C(1C). The impugned order of the ITAT was set aside, and the substantial question of law was answered in favour of the assessee.

The High Court held that the prayer made by the learned counsel for the Appellant, seeking disposal of the appeal in light of the Circular dated 17.09.2024, was fair and reasonable. The Court noted that the Circular No. 5/2024, as revised by the subsequent circular dated 17.09.2024, enhanced the monetary limit for filing appeals before the High Court to Rs. 2 crores. Paragraph 5 of the 17.09.2024 circular explicitly states that it shall apply to appeals to be filed henceforth and also to appeals pending before the High Courts, which may accordingly be withdrawn. Since the tax liability in the present case was less than Rs. 2 crores, the Court found it appropriate to dispose of the Tax Case in terms of the submissions and the circular. The operative direction was to dispose of the Tax Case.

The High Court held that the prayer made by the Revenue's counsel was fair and reasonable. In view of the submission that the monetary limit (tax liability) in the present case is less than Rs.2 Crores and in light of Para-5 of the Circular dated 17.09.2024, the instant Tax Case stands disposed of. The Circular clarifies that it shall apply to SLPs/Appeals to be filed henceforth and also to SLPs/Appeals pending before Supreme Courts/High Courts/Tribunal, which may accordingly be withdrawn. The Court did not decide the merits of the appeal but disposed of it based on the revised monetary limits and the circular.

The High Court held that the submission made by the learned counsel for the appellant (Assistant Commissioner of Income Tax) is fair and reasonable. The Court noted that the Government of India, Ministry of Finance, had issued a circular dated September 17, 2024, which revised the monetary limits for filing Income Tax Appeals before the High Court to Rs. 2 Crores. As the tax liability in the present case was stated to be less than Rs. 2 Crores, and in light of paragraph 5 of the said circular which states that it shall apply to SLPs/Appeals pending before High Courts which may accordingly be withdrawn, the Tax Case was disposed of. The reasoning is based on the department's own policy to withdraw appeals below the enhanced monetary threshold. The ratio is that appeals filed by the revenue before the High Court, where the tax effect is below the revised monetary limit specified in a CBDT circular, should be withdrawn or disposed of accordingly.

The High Court held that the principles of natural justice were violated by the Commissioner of Income Tax (Appeals) (CIT(A)) in passing the impugned orders dated December 29, 2023. The Court found that the petitioner was not afforded an opportunity for a personal hearing, despite making a request for it, and that the orders were not communicated. The Court emphasized that a defect of natural justice occurring at the initial stage cannot be cured at the appellate stage. Consequently, the impugned order dated December 29, 2023, was set aside. The matter was remitted back to the CIT(A) with a direction to grant the petitioner a personal hearing on February 28, 2025, and to decide the appeal within 45 days thereafter. The Court clarified that it had not entered into the merits of the assessment and the Appellate Authority would be free to decide the case after hearing both parties. The petitioner was granted liberty to raise all objections before the Appellate Tribunal.

The High Court held that the writ petitions were maintainable despite the existence of an alternative remedy, as the orders passed by the CIT(A) were in clear violation of the principles of natural justice. The Court found that the CIT(A) failed to provide the petitioner with an opportunity for a personal hearing, despite a specific request made through a rejoinder, and that the impugned orders were not communicated. The Court cited the Supreme Court's decision in Institute of Chartered Accountants of India Vs. L.K. Ratna and Others, AIR1987 SC71, stating that a defect of natural justice at the initial stage cannot be cured by giving an opportunity at the appellate stage. Consequently, the Court set aside the impugned order dated December 29, 2023, and remitted the matter back to the CIT(A) for reconsideration. The CIT(A) was directed to grant the petitioner a personal hearing and decide the appeal within 45 days from the date of hearing. The Court explicitly stated that it had not entered into the merits of the assessment.

The High Court held that the prayer made by the learned counsel for the appellant (Revenue) was fair and reasonable. The Court noted that the new circular dated 17.09.2024, issued under Section 268A of the Income-tax Act, 1961, has enhanced the monetary limit for filing appeals before the High Court to Rs. 2 Crores. As the tax liability in the present case was less than this enhanced limit, the Court found it appropriate to dispose of the appeal. The Court explicitly mentioned that the circular applies to pending appeals which may accordingly be withdrawn. Therefore, the appeal was disposed of in terms of the circular.

The High Court held that the principles of natural justice were violated by the CIT(A) in passing the impugned orders dated December 29, 2023. The Court noted that the petitioner had requested a personal hearing before the CIT(A), but this request was not considered. The Court emphasized that a defect in natural justice at the initial stage cannot be cured at the appellate stage, citing the Supreme Court's decision in Institute of Chartered Accounts of India Vs. L.K.Ratna and Others. Consequently, the impugned order dated December 29, 2023, was set aside. The matter was remitted back to the CIT(A) (Respondent No. 2) with a direction to grant the petitioner a personal hearing on February 28, 2025, or a subsequently fixed date. Both the petitioner and the Assessing Officer were to be given an opportunity to be heard. The CIT(A) was directed to decide the appeal within 45 days from the date of hearing. The Court explicitly stated that it had not entered into the merits of the assessment and the Appellate Authority would be free to decide the case after hearing the parties. The petitioner was granted liberty to raise all objections before the Appellate Tribunal.

The High Court held that while an alternative remedy exists, the writ court can entertain a petition if there is a violation of natural justice or if the proceedings are without jurisdiction. In this case, Petitioner No. 3 had continuously raised objections regarding its exemption status under Section 136(c) of the Municipal Corporation Act, 1956. The Court found that the Municipal Corporation failed to follow the mandatory procedure under Section 148 of the Act, which requires the Commissioner to give notice of the time and place for investigating objections and to hear the objector. This procedural lapse, coupled with the long-standing nature of the objection (since 2010) without a speaking order, amounted to a violation of natural justice. The Court directed the Commissioner to decide the objection in terms of Section 148, granting the petitioner eight weeks to obtain any necessary documents from the income tax authorities. Coercive steps for the earlier notices were stayed until the adjudication, which was to be completed within six months with a speaking order.

The High Court held that the question concerning the procedure for considering stay applications and demanding deposits pending appeal is no longer res integra, having been well-settled by decisions of the Bombay High Court, which were followed by the Chhattisgarh High Court. The Court agreed with the principles laid down in KEC International Ltd. and UTI Mutual Fund, which mandate that authorities must consider stay applications by setting out the assessee's case, giving prima facie reasons for any deposit requirement, assessing financial viability, and avoiding coercive measures during appeal periods unless there's a risk of the demand being defeated. The Court found that the impugned communication, which made the 20% deposit a condition precedent for hearing the stay application without a reasoned order, was not in line with these established guidelines. Consequently, the communication dated 06.09.2024 was set aside, and the matter was remitted back to the competent authority to consider the stay application afresh in light of the aforementioned guidelines and pass a reasoned order within four weeks. The writ petition was allowed to the extent indicated.

The High Court held that there was an admitted delay of 39 days in filing the appeal before the ITAT. The assessee's reason for the delay was that the appeal migrated to the National Faceless Appeal Centre, and the assessee lacked knowledge of notices and the CIT(A)'s order. The Court noted that the Supreme Court, in a related matter concerning the same assessee (Vidya Shankar Jaiswal), had set aside the High Court's order rejecting an appeal on delay grounds and adopted a justice-oriented and liberal approach by condoning a delay of 166 days. Considering the assessee's reasons for delay, the fact that the revenue did not file a counter-affidavit controverting these reasons, and the Supreme Court's precedent, the High Court condoned the 39-day delay. The substantial question of law was answered accordingly. The matter was remitted back to the ITAT for deciding the appeal on merits. The appeal was allowed to the extent indicated.

The High Court held that the submission made by the learned counsel for the appellant (Principal Commissioner of Income Tax) was fair and reasonable. The Court noted that the monetary limit for filing appeals before the High Court had been enhanced to Rs. 2 Crores by the CBDT Circular dated September 17, 2024. Since the tax liability in the present case was less than this enhanced limit, and in light of paragraph 5 of the said circular which allows for the withdrawal of pending appeals, the Court disposed of the Tax Case. The operative direction was to dispose of the appeal finally based on the circular.

The High Court held that the submission of the learned counsel for the appellant (Revenue) was fair and reasonable. The Court noted that the monetary limit for filing appeals before the High Court has been enhanced to Rs. 2 Crores by the circular dated September 17, 2024. Since the tax liability in the present case is less than Rs. 2 Crores, the Court, in light of paragraph 5 of the aforesaid circular dated September 17, 2024, disposed of the instant Tax Case. The reasoning is based on the revised monetary limits for filing appeals, which also permits withdrawal of pending appeals that fall below the new threshold. The operative direction was to dispose of the Tax Case.

The High Court held that the Assessing Officer had valid and proper satisfaction for believing that income had escaped assessment for the relevant assessment years. The court distinguished the case of *Nevendram Ahuja* on facts, noting that in the present case, a report was sought from the District Valuation Officer regarding construction, which revealed unexplained investment and expenditure below the assessed cost. This difference constituted tangible material for reopening. The court also found the judgment in *Techspan India Private Limited* to be unhelpful to the petitioner, as a survey had revealed sufficient tangible material. The court concluded that the Assessing Officer's satisfaction was based on the District Valuation Officer's report and the survey, which indicated undervalued income. Therefore, the notices were not issued without jurisdiction. The court dismissed the petition, stating that the petitioner would have full opportunity to raise defenses in appellate proceedings and that the observations made would not prejudice the decision of any statutory appeal.

The High Court held that the submission made by the learned counsel for the appellant was fair and reasonable. The Court noted that the Government of India, Ministry of Finance, had issued a circular dated 17.09.2024, revising the monetary limits for filing Income Tax Appeals before the High Court to Rs. 2 Crores. The Court also referred to paragraph 5 of this circular, which clarifies that the modifications shall come into effect from the date of issue and will apply to appeals to be filed henceforth as well as pending appeals, which may accordingly be withdrawn. Since the monetary limit (tax liability) in the present case was less than Rs. 2 Crores, the High Court, in light of the aforesaid circular, disposed of the instant Tax Case. The operative direction was to dispose of the appeal.

The High Court held that the submission made by the learned counsel for the appellant (revenue) was fair and reasonable. The court noted that the monetary limit for filing appeals before the High Court has been enhanced to Rs. 2 Crores by the circular dated 17.09.2024. Since the tax liability in the present case was less than Rs. 2 Crores, the court found it appropriate to dispose of the Tax Case in light of the aforesaid circular, specifically paragraph 5 which allows for the withdrawal of pending appeals before High Courts. The operative direction was to dispose of the Tax Case.

The High Court of Chhattisgarh at Bilaspur disposed of the writ petition by directing Respondent No. 2, the National Faceless Appeal Centre (NFAC), to consider and decide the petitioner's pending appeal on its merits. The Court mandated that the decision should be made in accordance with the law as far as possible within an outer limit of 60 days from the date of receipt or submission of a copy of the order. The reasoning for the delay, as presented by the revenue concerning the National Faceless Scheme and record transfer issues, was acknowledged but did not prevent the Court from issuing a time-bound direction for disposal. No specific finding was made on the merits of the appeal itself, as the petition was primarily for a direction to decide.

The High Court held that the prayer made by the learned counsel for the appellant (Revenue) is fair and reasonable. The Court noted that the CBDT Circular dated 17.09.2024, issued under Section 268A of the Income-tax Act, 1961, has revised the monetary limits for filing appeals before the High Court to Rs. 2 Crores. Paragraph 5 of this circular clarifies that it shall apply to appeals to be filed henceforth and also to appeals pending before the High Courts, which may accordingly be withdrawn. Since the tax liability in the present case is less than Rs. 2 Crores, the Court found it appropriate to dispose of the Tax Case in light of the aforesaid circular. The operative direction is that the Tax Case stands disposed of.

The High Court held that the appeal should be disposed of in terms of the Circular dated 17.09.2024. The Court noted the submission by the appellant (Revenue) that a new circular dated 17.09.2024 had been issued by the Ministry of Finance, Government of India, enhancing the monetary limit for filing Income Tax Appeals before the High Court to Rs. 2 Crores. As the tax liability in the present case was stated to be less than Rs. 2 Crores, the appellant requested the appeal be disposed of finally. The respondent (Assessee) did not controvert this submission. The Court, in light of the aforesaid submission and the circular, disposed of the Tax Case. The operative direction was to dispose of the appeal, implying it was not decided on merits but based on the revised policy on litigation management.