Rajasthan High Court Judgments — 2022

The High Court held that both writ petitions have become infructuous. This decision was based on the submission made by the learned counsel for the petitioners, who stated that the petitions were rendered infructuous in view of the Supreme Court's judgment in the case of Union of India & Ors. vs Ashish Agarwal. Consequently, the High Court disposed of both writ petitions as having become infructuous. No specific findings on the merits of the original challenges were made, as the petitions were decided on the basis of their subsequent status. The operative direction was to dispose of the petitions.

The High Court of Judicature for Rajasthan at Jodhpur held that both writ petitions had become infructuous. This decision was based on the submission made by the learned counsel for the petitioners, who cited the Supreme Court's judgment in Union of India & Ors. vs Ashish Agarwal. The High Court accepted this submission without delving into the merits of the original dispute. Consequently, the operative direction was to dispose of both writ petitions as having rendered infructuous. No specific issues were decided on their merits, and no principle can be cited for future cases beyond the procedural outcome.

The High Court disposed of the writ petition without entertaining it directly. The Court directed the Assessing Authority to consider the petitioner's objections regarding the validity and jurisdiction of the notices issued under Section 153-C of the Income Tax Act. The Assessing Authority was instructed to examine these objections, either while passing the assessment orders or as a preliminary issue, if assessment orders had not yet been passed. The Assessing Authority was granted the liberty to consider all legal objections raised by the petitioner pertaining to the validity of the impugned notices. The Court did not decide on the merits of the jurisdictional or limitation issues.

The High Court held that the FIR was based on an open inquiry where the applicant was heard. The court noted that the applicant did not show his alleged rental and agricultural income in his income tax returns.

The High Court held that the writ petition had become infructuous. This conclusion was based on the submission made by the learned counsel for the petitioner, referencing the Supreme Court's decision in Union of India & Ors. Vs. Ashish Agarwal. The Supreme Court's ruling likely pertained to a matter that rendered the present writ petition moot or unnecessary. Consequently, the High Court dismissed the petition as infructuous. No other issues were decided, and no specific relief was granted or denied on the merits of the original challenge. The ratio decidendi is that a writ petition, if rendered infructuous by a higher court's decision, should be dismissed on that ground.

The Court permitted the petitioner to withdraw the writ petitions. The petitions were accordingly dismissed with the liberty granted to the petitioner to challenge subsequent actions before the proper forum. The reasoning for this decision is based on the petitioner's submission regarding subsequent developments and the desire to pursue remedies elsewhere. No specific findings on the merits of the original challenge are recorded, as the petitions were withdrawn. The operative direction is the dismissal of the petitions with liberty to the petitioner.

The High Court permitted the petitioner to withdraw the writ petitions. The Court's decision was to dismiss the petitions with the liberty granted to the petitioner to challenge subsequent actions before the appropriate forum. The reasoning for this decision is based on the petitioner's submission regarding subsequent developments and the desire to pursue remedies elsewhere. The operative direction is the dismissal of the petitions with the specified liberty. No specific findings on the merits of any tax dispute were made as the petitions were withdrawn.

The High Court held that the plea of the respondent authorities that they were not intimated regarding the death of the assessee Smt. Shobha Mehta was factually incorrect. A perusal of the earlier assessment proceedings for assessment year 2015-16 clearly indicated that the Deputy Commissioner of Income Tax, Circle-2, Udaipur had been intimated about the assessee's death, and the assessment order dated 21.12.2017 was passed taking this fact into account. It was undisputed that the reassessment notice under Section 148 was issued to the deceased assessee, who had expired approximately 6 years prior. Crucially, no notice whatsoever was issued to the legal representative(s) of the assessee before undertaking the reassessment proceedings. Consequently, the impugned reassessment and assessment orders, having been passed against a dead assessee without proper notice to the legal heir, were declared invalid and unsustainable in law. The Court struck down the reassessment notice and the assessment order. The writ petition was allowed on these terms.

The High Court noted that an interim order was in place protecting the petitioner because the notice under Section 148 was digitally signed on 02.04.2021. However, the Supreme Court, in Union of India & Others Vs. Ashish Agarwal, provided specific directions that notices issued under the unamended Section 148 after 01.04.2021 should be deemed to have been issued under Section 148A and construed as show-cause notices. The Supreme Court also dispensed with the requirement of enquiry under Section 148A(a) as a one-time measure and directed assessing officers to pass orders under Section 148A(d) and then issue notice under the substituted Section 148. The High Court held that in light of these Supreme Court directions, the interim order protecting the petitioner automatically came to an end. The Court observed that the department had proceeded to pass an order under Section 148A(d). Therefore, the writ petition was disposed of, granting liberty to the petitioner to challenge the order passed under Section 148A(d) on any available grounds.

The High Court held that the writ petition had become infructuous. This decision was based on the joint submission by both the petitioner and the respondents that the notice initially issued under Section 148 of the Income Tax Act, 1961, was being processed as a proceeding under Section 148A(b) of the Act. This reclassification was in compliance with the Supreme Court's judgment in Union of India & Others Vs. Ashish Agarwal. Consequently, the Court disposed of the writ petition. However, liberty was granted to the petitioner to revive the petition if any future eventuality so arose. The Court directed that a copy of the notice dated 19.05.2022 be placed on record.

The High Court agreed with the appellant's submission that the tax liability in the present case was less than the enhanced monetary limit. Consequently, the appeal was disposed of in light of the new circular.

The High Court held that the finding recorded by the Tribunal regarding the transactions being made by the appellant and the appellant being the beneficiary of those transactions is based on various transactions and material on record indicating that the appellant himself was engaged in purchasing and selling plots. The Court found that these findings, as recorded in paragraph 5 of the Tribunal's order, are essentially findings of fact. Consequently, no substantial question of law arises for consideration in the appeal. The appeal is therefore dismissed.

The Rajasthan High Court, Jaipur Bench, disposed of the writ petition in terms of the Supreme Court's order in Union of India & Others Vs. Ashish Agarwal. The Supreme Court had directed that notices issued under the unamended Section 148 of the Income Tax Act, 1961, after 01.04.2021, shall be deemed to have been issued under Section 148A of the Act and treated as show-cause notices. The Assessing Officer was directed to provide information relied upon within thirty days, and assessees were to reply within two weeks thereafter. The requirement of conducting an enquiry under Section 148A(a) was dispensed with as a one-time measure. The Assessing Officer was to pass orders under Section 148A(d) and thereafter issue notice under Section 148 as substituted. All defenses available to the assessees and the Revenue under the Finance Act, 2021, and law were preserved. The High Court noted that any assessment order passed would lose its efficacy in light of the Supreme Court's directions and that further action would depend on the order passed under Section 148A(d).

The High Court held that the writ petition was finally disposed of in terms of the order dated 04.05.2022 passed by the Hon’ble Supreme Court in Union of India & Others Vs. Ashish Agarwal. The Supreme Court's order, which was made applicable PAN India, modified and substituted the impugned judgments and orders of various High Courts. Specifically, notices issued under the unamended Section 148 of the IT Act, which were subject to writ petitions, were to be deemed issued under Section 148A of the IT Act as substituted by the Finance Act, 2021, and treated as show-cause notices under Section 148A(b). The Assessing Officer was directed to provide information relied upon within thirty days, with assessees having two weeks to reply. The requirement of enquiry under Section 148A(a) was dispensed with as a one-time measure. The Assessing Officer was to pass orders under Section 148A(d) and thereafter issue notice under Section 148 as substituted. Crucially, all defences available to the assessees, including under Section 149, and all rights and contentions under the Finance Act, 2021, were preserved. The authorities were directed to proceed in accordance with these directions.

The tribunal erred in calculating the deceased's annual income by averaging income over four assessment years. The court modified the award by recalculating the income based on the income tax return filed prior to the accident and adjusted deductions for personal expenses.

The High Court allowed the petitioner's request to withdraw the writ petition. Consequently, the writ petition was dismissed as withdrawn. The stay application filed in the writ petition was also dismissed as a consequence of the petition being withdrawn. The court did not decide any substantive issues related to the income tax assessment or the merits of any dispute between the petitioner and the revenue.

The High Court declined to exercise its discretionary writ jurisdiction under Article 226 of the Constitution of India. The court noted that while the petitioner raised grounds challenging the assessment order, including the validity of the Section 148 notice, the petitioner had failed to challenge the notice when it was issued and subsequently allowed the limitation period for filing an appeal against the assessment order to expire. The court found that the petitioner had not availed the statutory remedy of appeal. Given the existence of a provision for condonation of delay in filing appeals, the court directed the petitioner to pursue that remedy by moving an appropriate application before the Appellate Authority. The writ petition was dismissed on the grounds of alternative remedy and the petitioner's failure to pursue available legal recourse in a timely manner.

The Tribunal held that the petitioner was at liberty to withdraw the writ petition. Consequently, the writ petition was dismissed as withdrawn. The stay application filed in support of the petition was also dismissed. No decision on the merits of the case was rendered. The principle that can be cited is that a petitioner has the right to withdraw their petition, leading to its dismissal without prejudice to any other proceedings.

The High Court held that the writ petition was to be finally disposed of in terms of the order dated 04.05.2022 passed by the Hon'ble Supreme Court in Union of India & Others Vs. Ashish Agarwal. The Supreme Court's directions, as incorporated in the judgment, stipulated that Section 148 notices issued under the unamended Act would be deemed to have been issued under Section 148A and treated as show-cause notices. The requirement of conducting an enquiry under Section 148A(a) was dispensed with as a one-time measure. The assessing officer was directed to provide information and material to the assessees, who would then have a period to reply. Subsequently, orders under Section 148A(d) were to be passed, followed by a notice under the substituted Section 148. All defenses available to the assessees and revenue were preserved. The operative direction was for the concerned authorities to proceed in accordance with the Supreme Court's directions.

The High Court disposed of the writ petition without commenting on the merits of the case. The Court directed the respondents to examine all grounds raised by the petitioner, particularly the impediment under Section 149 of the Income Tax Act, 1961, and pass an order in accordance with the law. The Court held that if the petitioner's grievance remained unredressed after the order, they would be at liberty to avail such remedies as may be available under the law. The operative direction was to consider the grounds raised and pass a reasoned order.

The High Court held that the question of whether the transactions, when taken together, exceeded Rs. 50 lacs, and the nature of these transactions, were essentially matters of factual inquiry. The Court found that the order under challenge was passed after giving the petitioner an opportunity of hearing and considering their reply, and thus did not suffer from procedural error. The adequacy or sufficiency of the reasons assigned by the authority was beyond the scope of interference unless perversity was established. Since the matter required factual inquiry, the Court refrained from commenting further and found no grounds for interference at that stage. The petitioner was granted liberty to raise all grounds, including those related to the transactions and the Rs. 50 lacs limit under Section 149, in further proceedings before the Assessing Authority. The petition was dismissed.

The High Court held that in view of the fact that assessment orders have been passed after the writ petitions were filed, and appeals have been preferred against these orders, the petitioners would be better advised to raise all permissible objections in the pending appeals. Consequently, the writ petitions were disposed of as withdrawn, with liberty granted to the petitioners to raise all permissible objections in the appeals filed against the final assessment orders. The stay applications were also disposed of as a consequence.

The High Court considered the prayer made by the learned counsel for the petitioner to withdraw the writ petition. Upon considering this request, the Tribunal allowed the withdrawal. The writ petition was accordingly dismissed as withdrawn, as prayed for by the petitioner's counsel. No decision was made on the merits of the case. The operative direction was to dismiss the petition as withdrawn.

The High Court held that the statutory scheme of Section 148A requires the Assessing Officer to conduct an inquiry and afford an opportunity of hearing before issuing a notice under Section 148. The Assessing Officer must decide, based on the material on record including the assessee's reply, whether it is fit to issue a notice under Section 148 by passing an order. The Court found that the impugned order recorded a finding that material evidence to verify the cryptocurrency transaction was not placed on record. The Court agreed with the revenue that bank transactions alone are insufficient to verify cryptocurrency trade; relevant ledger statements are necessary. The Court noted that the petitioner had not submitted the concerned ledger statements in the writ petition. While the authority considered the reply, albeit briefly, for the purpose of deciding whether to draw proceedings under Section 148, the exercise fulfilled the legal requirement of Section 148A. The Court granted liberty to the petitioner to submit appropriate documentary evidence in support of the information in Section 148 proceedings. The Court was not inclined to interfere with the order as it found it neither perverse nor lacking jurisdiction. The petition was dismissed.

The High Court held that in view of the statement made by the learned counsel for the respondent-Revenue, nothing survives in the present case. The Court found that the petition had been rendered infructuous. The reasoning was based on the submission that due to the alleged escaped income being less than Rs. 50 lacs, and in light of the Supreme Court's order and CBDT instructions, no action was being pursued by the Revenue. The operative direction was to dispose of the writ petition as having rendered infructuous. No specific issue was left undecided; the entire petition was disposed of on the basis of the concession made by the Revenue.

The Court held that the writ petition had become infructuous. This was based on the submission by the respondent Department that an assessment order had already been passed. A copy of this assessment order, dated June 11, 2021, was placed on record. Consequently, the Court granted the petitioners liberty to challenge the assessment order as per the law. The writ petition was disposed of as infructuous, without deciding the merits of the original challenge to the summons. No specific finding was made on the validity of the summons itself, as the matter was decided on the subsequent development.

The High Court held that for initiating proceedings under Section 148 of the Income Tax Act, 1961, after a period of three years from the end of the relevant assessment year, it is not enough to merely have material suggesting that some income has escaped assessment. The statute, specifically Section 149(1)(b), mandates that the amount of escaped income must be Rs. 50,00,000/- or more. The Court found that the Assessing Officer's conclusion that the assessee might have more bank accounts, based solely on the disclosed cash deposits of Rs. 19,39,000/-, was a surmise and not supported by tangible material on record at the time of passing the order under Section 148A(d). Such an interpretation would frustrate the object of Section 148A. The Court distinguished the reliance placed by the revenue on the Delhi High Court's decision in Gulmuhar Silk Pvt. Ltd. as not applicable to the present facts, where the revenue failed to place any material to suggest escaped income exceeding Rs. 50,00,000/-. Consequently, the impugned order and the notice under Section 148 were quashed and set aside. The petition was allowed.

The High Court declined to interfere with the orders passed under Section 148A(d) solely on the ground of denial of adjournment, noting that no extraordinary grounds for seeking such adjournment were placed before the court. However, the court acknowledged the substantial point raised by the petitioners regarding the incorrect treatment of a single cash deposit of Rs. 34,01,000/- as two separate transactions totaling Rs. 68,02,000/-. The court held that this objection, which pertains to the factual correctness and the amount of alleged income chargeable to tax being less than Rs. 50,00,000/-, should be considered by the authority in the proceedings under Section 148 of the Act. The assessing authority was directed to decide this objection with reference to the material placed by the petitioners and by collecting other relevant materials, including bank transactions and statements, providing clear reasons. The petitions were disposed of at this stage with liberty to the petitioners to revive their cases if necessary.

The High Court held that the writ petition filed by the petitioner was premature at this stage. The petitioner had already submitted a reply to the notice, raising objections, including the applicability of Section 149 of the Act. Since the respondent-authority had not yet passed any order deciding these objections, the Court was of the opinion that the petitioner should await the decision of the authority. The Court granted liberty to the petitioner to pursue appropriate legal remedies if the objection raised by him is not sustained and the authority proceeds with the matter without deciding the objection, particularly concerning Section 149 of the Act. The writ petition was dismissed at this stage with the liberty granted.

The High Court held that while the petitioners had requested an adjournment to respond to the Section 148A notices, and the orders passed under Section 148A(d) did not refer to this prayer, the court was not inclined to interfere solely on this ground, as there were no extraordinary circumstances presented for the adjournment. However, the court found the petitioners' substantial objection regarding the mischaracterization of a single cash deposit of Rs. 34,01,000/- as two separate transactions totaling Rs. 68,02,000/- to be significant. The court directed that this objection must be considered by the authority in the proceedings under Section 148. The authority is obligated to decide this objection with reference to the material placed by the petitioners and by collecting other relevant evidence, including bank transactions, to determine if the alleged income chargeable to tax is indeed less than Rs. 50,00,000/- due to only a single transaction of Rs. 34,01,000/-. The petitions were disposed of with liberty to revive if necessary.

The High Court held that the writ petition was to be finally disposed of in terms of the order dated 04.05.2022 passed by the Supreme Court in Union of India & Others Vs. Ashish Agarwal. The Supreme Court had directed that impugned Section 148 notices issued under the unamended Act, which were subject to writ petitions, shall be deemed to have been issued under Section 148A of the IT Act and construed as show-cause notices under Section 148A(b). The Assessing Officer was directed to provide information and material to the assessees within thirty days, allowing them two weeks to reply. The requirement of conducting an enquiry under Section 148A(a) was dispensed with as a one-time measure for notices issued from 01.04.2021 till date. Thereafter, Assessing Officers were to pass orders under Section 148A(d) and then issue notice under Section 148 as substituted. All defenses available to the assessees and the Revenue under the Finance Act, 2021, and law were preserved. The Supreme Court's order was made applicable PAN India and was passed in exercise of powers under Article 142 of the Constitution of India.

The High Court acknowledged that the orders under Section 148A(d) did not refer to the petitioners' prayer for adjournment. While not inclined to interfere solely on the ground of denied adjournment, considering the absence of extraordinary reasons for seeking it, the Court found the petitioners' substantial objection regarding the erroneous bifurcation of a single cash deposit of Rs. 34,01,000/- into two transactions to be significant. The Court directed that this objection must be considered by the authority in the proceedings under Section 148. The authority is obligated to decide this objection with reference to the material placed by the petitioners, other collected evidence including bank transactions, and provide clear reasons, especially concerning the claim that the chargeable income is less than Rs. 50,00,000/- due to only one transaction of Rs. 34,01,000/-.

The High Court held that the notices and proceedings initiated under Section 148 of the Income Tax Act, 1961, were a nullity because they were issued against a deceased person, Smt. Anguri Devi Khandelwal, who had passed away prior to the issuance of the notice. The Court also acknowledged the applicability of the Supreme Court's decision in Union of India & Others Vs. Ashish Agarwal. Consequently, the petition was disposed of in terms of the Supreme Court's directions. The Court allowed the respondent liberty to proceed against the legal representative of the deceased in accordance with the directions given in the Ashish Agarwal judgment. This involved treating the impugned Section 148 notices as Section 148A notices and allowing the Assessing Officer to proceed afresh, providing information to the assessee and passing orders under Section 148A(d) before issuing a notice under Section 148. All defenses available to the assessee and revenue were preserved.

The High Court held that the notices and proceedings drawn under Section 148 of the Income Tax Act, 1961, against the deceased assessee, Smt. Anguri Devi Khandelwal, were a nullity, as the assessee had passed away on March 10, 2021, prior to the issuance of the notice on June 28, 2021. The court acknowledged the admission by the respondent's counsel regarding this factual aspect. Furthermore, the court found the judgment of the Hon'ble Supreme Court in Union of India & Others Vs. Ashish Agarwal to be applicable. Consequently, the writ petition was disposed of in terms of the Supreme Court's directions. The court granted liberty to the revenue to proceed against the legal representative of the deceased assessee in accordance with the directions laid down in the Ashish Agarwal case, which involves treating the Section 148 notices as show-cause notices under Section 148A and following the prescribed procedure. No specific amount in dispute was recorded.

The High Court allowed the writ petition. It held that the Revenue's action of adjusting refunds in excess of 20% of the disputed demand for AY 2017-18 was de hors statutory provisions, including Section 220(6) and Section 245 of the IT Act, and without jurisdiction under Sections 222 and 223. The court found that the respondents failed to honor departmental circulars, settled legal principles, and judicial discipline, as highlighted by the Supreme Court in Union of India (UOI) & Ors. Vs. Kamlakshi Finance Corporation Ltd. The court directed the respondents to issue a refund to the petitioner-assessee along with interest for the amount adjusted in excess of 20% of the disputed demand within thirty days. Strictures were issued for departmental action against errant officers, and a cost of Rs. 50,000 was imposed on the respondents, to be deposited with the Rajasthan State Legal Services Authority.

The High Court held that for a penalty to be leviable under Section 271(1)(c) of the Income Tax Act, 1961, there must be satisfaction based on material that the assessee has concealed particulars of income or furnished inaccurate particulars. The Court found no material on record to conclude that the assessee had submitted inaccurate particulars to claim the benefit of deduction under Section 43(1). The Tribunal's finding that the assessee had disclosed all facts in the Balance Sheet and that the subsidy was not reduced from the cost based on its interpretation of Section 43(1) was noted. The Court agreed with the Tribunal that irrespective of the applicability of the proviso to Explanation 10 of Section 43(1), the requirement for penalty under Section 271(1)(c) necessitates proof of concealment or inaccurate particulars. The Court concluded that no question of law arose for consideration and dismissed the appeal. The issue of deduction under Section 43(1) was stated to be pending consideration in appeal, and this order pertained only to the penalty aspect.

The High Court held that for penalty under Section 271(1)(c) to be leviable, there must be satisfaction based on material that the assessee concealed particulars of income or furnished inaccurate particulars. The Tribunal had found that the assessee disclosed complete particulars of the subsidy and claimed depreciation on the entire windmill, relying on various judicial pronouncements. The Tribunal noted that all information was available in the Balance Sheet and that the assessee's interpretation of the Proviso to Explanation 10 of Section 43(1) was based on reliance on a precedent. The High Court agreed with the Tribunal that the mere fact that the proviso to Explanation 10 of Section 43(1) was found not applicable to the assessee did not automatically lead to an inference of inaccurate particulars. The Court found no material to conclude that the assessee submitted inaccurate particulars to claim the benefit of deduction. Therefore, no question of law arose for consideration, and the appeal was dismissed. The order specifically relates to the aspect of penalty and not the claim of deduction under Section 43(1).

The ITAT correctly held that once registration under Section 12AA is granted and not cancelled, the CIT cannot deny approval under Section 80G based on the genuineness of activities. The High Court upheld this decision.

The Tribunal held that the assessee had disclosed complete particulars of the subsidy of Rs. 36.00 crores in its Balance Sheet. It reasoned that the claim for depreciation at 80% on the entire windmill, without reducing the subsidy from the cost, was based on various decisions of Coordinate Benches of the ITAT and the Hon'ble High Court, and the assessee's interpretation that the Proviso to Explanation 10 of Section 43(1) was not applicable. The Tribunal emphasized that for penalty proceedings under Section 271(1)(c), there must be a satisfaction based on material that the assessee concealed particulars or furnished inaccurate particulars. It found no material to conclude that the assessee submitted inaccurate particulars to claim the benefit under Section 43(1). Therefore, the Tribunal upheld the deletion of the penalty of Rs. 15,07,77,715/-. The High Court agreed with the Tribunal's reasoning, stating that irrespective of the applicability of the proviso, there must be material to show concealment or inaccurate particulars. Finding no such material, the High Court dismissed the appeal, leaving the aspect of deduction claim undecided as it was pending.

The Rajasthan High Court held that the writ petition is finally disposed of in terms of the order dated 04.05.2022 passed by the Hon'ble Supreme Court in the case of Union of India & Others Vs. Ashish Agarwal. The Supreme Court, in its order, directed that impugned Section 148 notices issued under the unamended Act shall be deemed to have been issued under Section 148A of the Income Tax Act, 1961, as substituted by the Finance Act, 2021, and construed as show-cause notices under Section 148A(b). The Assessing Officer is to provide information and material relied upon within thirty days, and assessees have two weeks to reply. The requirement of conducting an enquiry under Section 148A(a) was dispensed with as a one-time measure. The Assessing Officers are to thereafter pass orders under Section 148A(d) and then issue notices under the substituted Section 148. All defences available to the assessees and revenue under the Finance Act, 2021, and law shall continue to be available. The High Court directed the authorities concerned to proceed in accordance with these directions.

The High Court allowed the Revenue's prayer to withdraw the appeal. The appeal was dismissed as withdrawn, aligning with the revised monetary limits for litigation management.

The High Court held that the appeals did not involve any substantial questions of law. This conclusion was based on the admission by the revenue's counsel that a similar controversy had been decided by a Coordinate Bench in the case of Principal Commissioner of Income Tax Vs. Shri Sanjay Chhabra. The Court referred to the reasoning in the Sanjay Chhabra judgment, which stated that the ITAT's findings were based on material placed on record and were not a result of ignorance of material evidence, no evidence, wrong inference from proved facts, or erroneous application of law. The judgment in Sanjay Chhabra also noted that the aspect of human probability went against the Revenue, especially when a statement recorded under Section 132(4) of the Income Tax Act was later retracted, and no other admissible material supported the addition. Consequently, the appeals were dismissed.

The High Court held that the appeals did not involve any substantial questions of law. This conclusion was based on the admission by the revenue's counsel that a similar controversy had been decided by a Coordinate Bench in the case of Principal Commissioner of Income Tax Vs. Shri Sanjay Chhabra. The Court referred to the reasoning in the Sanjay Chhabra judgment, which stated that the ITAT's findings were based on material placed on record and were not a result of ignorance of material evidence, no evidence, wrong inference from proved facts, or erroneous application of law. The judgment in Sanjay Chhabra also noted that the aspect of human probability went against the Revenue, especially when a statement recorded under Section 132(4) of the Income Tax Act was later retracted, and no other admissible material supported the addition. Consequently, the appeals were dismissed.

The High Court held that in view of the clear stipulation in the CBDT Circular dated 17th September 2024, the Income Tax Authorities were under an obligation not to press the appeal. The Court found that the monetary limit for filing appeals before the High Court was not met. Consequently, the appeal was dismissed. The ratio decidendi is that appeals filed in contravention of mandatory monetary limits prescribed by CBDT circulars are liable to be dismissed. The operative direction was the dismissal of the appeal.