Commissioner Of Income Tax-I, New Central Revenue Building,Statue Circle, Jaipur. (Raj v. Satish Kumar Agarwal

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 8/2021 Commissioner Of Income Tax-I, New Central Revenue Building,Statue Circle, Jaipur. (Raj.) ----Appellant Versus Satish Kumar Agarwal, R/o -406, Bilala Bahwan, Hanuman KaRasta, Johari Bazar, Jaipur (Raj.) ----Respondent D.B. Income Tax Appeal No. 46/2020 Principal Commissioner Of Income Tax-I, New Central RevenueBuilding, Statue Circle, Jaipur (Raj) ----Appellant Versus Shri Rahul Sharma, 80/2, Madhyam Marg, Mansarovar, Jaipur. ----Respondent Connected With D.B. Income Tax Appeal No. 43/2018 Principal Commissioner Of Income Tax-I, New Central RevenueBuilding, Statue Circle, Jaipur Raj. ----Appellant Versus Shri Rahul Sharma, 80/2, Madhyam Marg, Mansarovar, Jaipur ----Respondent D.B. Income Tax Appeal No. 23/2022 Pr. Commissioner Of Income Tax, Udaipur. ----Appellant Versus Vinayaka Microns (India) Private Ltd., 385 -386, VinayakaSendra Road, Sainath Nagar, Gram Thikrana Rajasthan. ----Respondent D.B. Income Tax Appeal No. 39/2023 Principal Commissioner Of Income Tax-I, Jaipur, New CentralRevenue Building, Statue Circle, Jaipur (Raj.) ----Appellant Versus Shri Surendra Meena, 36, Pratap Nagar, Shastri Nagar, Jaipur. ----Respondent D.B. Income Tax Appeal No. 21/2023 The Principal Commissioner Of Income Tax, Udaipur. ----Appellant Versus Smt. Rekha Shekhawat, Police Line, Gopal Vihar, Kota-324002. ----Respondent For Appellant(s) : Mr. Anuroop Singhi with Mr. N.S. BhatiMr. Aditya KhandelwalMr. Anurag Mathur with Mr. Aditya Doda &Mr. Parth Vashistha for Mr. Shantanu Sharma For Respondent(s): Mr. Siddharth Ranka with Ms. Satwika JhaMs. Apeksha BapnaMr. Rohan ChatterMr. Gunjan Pathak with Mr. Aditya BohraMs. Ishita RawatMr. Kanishka SinghalMr. Mahendra Gargieya with Mr. Hemang GargieyaMr. Devang Gargieya HON'BLE MR. JUSTICE AVNEESH JHINGAN HON'BLE MR. JUSTICE PRAVEER BHATNAGAR Order 27/09/2024 -AVNEESH JHINGAN, J: 1.The issue involved in these appeals is similar and is beingdecided by this order. The facts are being noted from D.B. IncomeTax Appeal No.8/2021. 2.This appeal is filed against the order dated 09.09.2020passed by the Income Tax Appellate Tribunal, Jaipur (for short 'theTribunal'). 3.The brief facts are that the respondent filed income taxreturn pertaining to assessment year 2015-2016, declaring totalincome of Rs.20,04,170/-. The assessment under Section 143(3)of the Income Tax Act, 1961 (for short 'the Act') was finalized on29.12.2017, disallowing the deduction of Rs.91,83,373/- claimedunder Section 54B. Assessment order was revised under Section263 of the Act on the ground that Section 50-C of the Act ought tohave been invoked. The assessment order was set aside andmatter remanded for assessment to be framed in view of theobservation made by the Revisional Authority. The appeal of theassessee was accepted by the Tribunal on 09.09.2020, hence thepresent appeal. 4.The tax effect in the appeal is Rs.13,93,590/-. The case ofthe department is that the revision was done on the basis of theaudit objection accepted by the department and the appeal fallswithin exceptions carved out in Circular No.3 of 2018 dated11.07.2018. 5.The issue involved is as to whether after issuance of CircularNo.9 of 2024 dated 17.09.2024, the exceptions of Circular 3 of2018 are applicable to pending appeals. 6.The contention of learned counsel for the appellant is thatPara 5 of Circular 9 of 2024 is giving retrospective effect only tothe enhanced monetary limit and not to the exceptions in Para 3.1& 3.2 of Circular 5 of 2024. 7.Learned counsel for the respondent submits that Circular 9 of2024 is applicable to all the pending appeals and appeals to befiled, there is no distinction made between appeals to be filed andpending appeals. 5.The issue involved is as to whether after issuance of CircularNo.9 of 2024 dated 17.09.2024, the exceptions of Circular 3 of2018 are applicable to pending appeals. 6.The contention of learned counsel for the appellant is thatPara 5 of Circular 9 of 2024 is giving retrospective effect only tothe enhanced monetary limit and not to the exceptions in Para 3.1& 3.2 of Circular 5 of 2024. 7.Learned counsel for the respondent submits that Circular 9 of2024 is applicable to all the pending appeals and appeals to befiled, there is no distinction made between appeals to be filed andpending appeals. 8.In a measure for reducing litigation circulars under Section268A of the Act are issued by the Central Board of Direct Taxes(CBDT) from time to time. The monetary limits for filing appeal bydepartment before the Tribunal, High Court and Supreme Courtare fixed and also the exceptions for filing appeals inspite of lowtax effect. 9.For dealing the issue, it would be pertinent to look into thelanguage of the previous circulars. In Instruction No.5 of 2008dated 15.05.2008, Instructions No. 3 of 2011 dated 09.02.2011and No.5 of 2014 dated 10.07.2014, Para 11 in all threeinstructions was that these shall apply to the appeals to be filedon or after the date of issuance and the appeals filed earlier shallbe governed by the instructions operating at the relevant time.Circular No.21 of 2015 dated 10.12.2015 was issued in super-session of Instruction No.5 of 2014. The monetary limit for filingthe appeals was enhanced and para 8 stipulated exceptions forfiling the appeal inspite of the low tax effect. Para 10 stated thatthe Circular will apply retrospectively and the pending appealsbelow specified monetary limit may be withdrawn/not pressed.Further that the appeals before the Supreme Court shall be governed by the instructions operative at the time of filing ofthese appeals. 10.Circular No.3 of 2018 dated 11.07.2018 superseded Circular21 of 2015. The monetary limits were enhanced. In Para 10 fourexceptions for filing appeals in case having tax effect less thanspecified monetary limits were set out. The exception in clause (c)of Para 10 is being relied upon by the department in this case. 11.Para 10(c) and 13 of circular 3 of 2018 are reproduced:-Para 10(c) "Where Revenue Audit objection in the case has been accepted by the Department". Para 13 :- "This Circular will apply to SLPs/appeals/cross objections/references to be filed henceforth in SC/HCs/Tribunal andit shall also apply retrospectively to pendingSLPs/appeals/cross objections/ references. Pendingappeals below the specified tax limits in para 3 abovemay be withdrawn/ not pressed." 12.From para 13, it is evident that the Circular had retrospectiveapplication and the appeals below specified monetary limits wereto be withdrawn or not pressed. 13.Circular 3 of 2018 was modified by Circular 17 of 2019 dated08.08.2019. The monetary limits were further enhanced and para5 of the Circular was substituted. Para 4 of this Circular clarifiedthat the modification shall apply with effect from the date of issueof the Circular. 14.Circular 3 of 2018 and Circular 17 of 2019 were supersededby Circular 5 of 2024 dated 15.03.2024. The monetary limits were enhanced and the exceptions for filing appeals inspite of low taxeffect were in Para 3.1 & 3.2. The exception of audit objectionhaving been accepted by department was no longer there. TheCircular was made applicable to the appeals to be filed from thedate of issue of the Circular. Para 10 of the Circular is quoted below:- "This issues under section 268A of the Act and shall comeinto effect from the date of issue of this Circular. ThisCircular will apply to SLPs/appeals to be filed henceforthbefore the SC/HCs/Tribunals." into effect from the date of issue of this Circular. ThisCircular will apply to SLPs/appeals to be filed henceforthbefore the SC/HCs/Tribunals." 14.Circular 3 of 2018 and Circular 17 of 2019 were supersededby Circular 5 of 2024 dated 15.03.2024. The monetary limits were enhanced and the exceptions for filing appeals inspite of low taxeffect were in Para 3.1 & 3.2. The exception of audit objectionhaving been accepted by department was no longer there. TheCircular was made applicable to the appeals to be filed from thedate of issue of the Circular. Para 10 of the Circular is quoted below:- "This issues under section 268A of the Act and shall comeinto effect from the date of issue of this Circular. ThisCircular will apply to SLPs/appeals to be filed henceforthbefore the SC/HCs/Tribunals." into effect from the date of issue of this Circular. ThisCircular will apply to SLPs/appeals to be filed henceforthbefore the SC/HCs/Tribunals." 15.By Circular 9 of 2024 dated 17.09.2024, monetary limitsspecified in Circular 5 of 2024 were enhanced. The exceptions inPara 3.1 & 3.2 of Circular No.5 of 2024 were retained.specified in Circular 5 of 2024 were enhanced. The exceptions inPara 3.1 & 3.2 of Circular No.5 of 2024 were retained. 16.Para 5 of Circular 9 of 2024 is reproduced:- "The modifications shall come into effect from the date of issue of this Circular. This Circular will apply toSLPs/appeals to be filed henceforth in SC/HCs/Tribunal.It shall also apply to the SLPs/appeals pending beforeSupreme Court/High Courts/Tribunal, which mayaccordingly be withdrawn."SLPs/appeals to be filed henceforth in SC/HCs/Tribunal.It shall also apply to the SLPs/appeals pending beforeSupreme Court/High Courts/Tribunal, which mayaccordingly be withdrawn." Para 5 made this circular applicable to the appeals to be filedthereafter and also to the appeals pending before the SupremeCourt, High Court and the Tribunal. 17. Circular 9 of 2024 albeit, enhanced the monetary limits butretained the exceptions in Para 3.1 & 3.2 of Circular 5 of 2024.From perusal of Para 5 of Circular 9 of 2024, it is evident that thecircular shall apply to the appeals to be filed henceforth and alsoto the appeals pending before the Supreme Court, High Court and the Tribunal. Thereby making monetary limit specified in it andexceptions in Para 3.1 & 3.2 of Circular 5 of 2024 applicable to allthe pending appeals. In other words, Circular 5 of 2024 wasapplicable prospectively but Circular 9 of 2024 while enhancingthe monetary limit, retaining the exceptions of Circular 5 of 2024made it applicable to the pending appeals also. 18.The contention of learned counsel for the appellant that theCircular give retrorespective effect only to the monetary limit lacksmerit. In case the argument is accepted, the result would be ofadding words to the clear and plain language of Para 5 of Circular9 of 2024. 19.The reliance of the counsel for the appellant on theexceptions carved out in Circular 3 of 2018 cannot be sustained.Circular 3 of 2018 was superseded by Circular 5 and theexceptions of Circular 5 with the enhanced monetary limits inCircular 9 of 2024 were made applicable to pending appeals. 20.The appeals are dismissed as non-maintainable in view ofthe Circular 9 of 2024. 21.The proposed substantial questions of law are kept open. (PRAVEER BHATNAGAR),J (AVNEESH JHINGAN),J Simple Kumawat /158, 156-157, 159, 161, 106 Whether Reportable:Yes