Commissioner Of Income Tax, Jaipur-Ii, Jaipur v. M/S Gad Fashion, G-152, Riico Sanganer Industrial Area Jaipur

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPURD.B. Income Tax Appeal No. 575 / 2008 COMMISSIONER OF INCOME TAX, JAIPUR-II, JAIPUR ----Appellant Versus M/S GAD FASHION, G-152, RIICO SANGANER INDUSTRIAL AREA JAIPUR ----Respondent _____________________________________________________For Appellant(s) : Mr. Sameer Jain For Respondent(s) : Mr. Sanjay Jhanwar _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE VIJAY KUMAR VYASOrder 15/11/2017 1. In view of the decision of full bench in D.B.Income Tax Appeal No. 575 / 2008 (Commissioner of IncomeTax, Jaipur-II vs. M/s. Gad Fashion) decided on10.11.2017 wherein it has held as under:- “17. From the policy which has beenreferred by different High Courts andthe intention of the legislation toreduce the pendency of the tax appealand to have a uniform policy for thedepartment through-out the Country,therefore, the direction issued by theCBDT is binding on all subordinateofficers and Section 268A(4) which hasbeen amended with retrospective effectis applicable with all force inpending matters. 18. The intention of the legislationis very clear to prohibit the appealanalogous to the provisions of Code ofCivil Procedure where there is aprohibition that appeal upto the valuewill not be entertained by the Court. 19. Under Section 260A of the Act onlyquestion of law is required to bedecided, therefore, on analogousprinciple of Section 96(4) of the CPC,if the legislation has thought it fitto prohibit the department to fileappeal, the instruction of CBDT to delegate the power, in our consideredopinion, the appeal is prohibited. Inview of sub-section (4) of Section 96of the CPC where it has beenprohibited that no appeal shall lie,except on a question of law, from adecree in any suit of the naturecognizable by Courts of Small Causes,when the amount or value of thesubject matter of the original suitdoes not exceed Rs.10,000/-. 20. In view of majority of High Courtdecisions where the view is in favourof the assessee and in view of all thejudgments referred by counsel for theassessee-respondent, if two views arepossible, then one view which is infavour of the assessee is required tobe upheld and the same is upheld. 21. The contention which has beenenvisaged is of the decision of theSupreme Court. There are ample powersunder Section 263 and 154, which willmeet the ends of justice and it willnot be out of place to mention thatthe writ can also be filed by thedepartment if it is a gross casedecided by any officer or authoritybut to that extent the appeal is notmaintainable and would amount to giveover riding effect to the statutoryprovisions.22. It is well known that the Courtsare flooded with litigation where theStateGovernmentandCentralGovernment or the Department orCorporation are the largest litigants,therefore, frivolous litigation iscurb for larger interest of avoidingmore Tribunals or Courts to decide thematters on merits.23. In that view of the matter, whenthe legislation had thought it fit toputsomeprohibitiononthedepartment, in our considered opinionthe issue is required to be answeredin favour of the assessee and againstthe department inasmuch as thecircular of the CBDT is binding on thesubordinate officers.” 2.Thus, the present appeal is governed by theCircular and since indisputably the tax effect asbrought to our notice, is less than Rs.20 lac. 2.1A Circular No.21/2015 has been issued by theCentral Board of Direct Taxes dated 10.12.2015 inexercise of its power u/sec. 268A (1) of the Income-tax Act 1961 in supersession of the Boards instructionNo.5/2014 dt.10.7.2014 regularising the monetary limitsfor filing the appeal by the Revenue before theTribunal, High Courts and Apex Court with an object forreducing litigation. Relevant para nos.3, 8, 9 and 10reads ad infra :- 2.Thus, the present appeal is governed by theCircular and since indisputably the tax effect asbrought to our notice, is less than Rs.20 lac. 2.1A Circular No.21/2015 has been issued by theCentral Board of Direct Taxes dated 10.12.2015 inexercise of its power u/sec. 268A (1) of the Income-tax Act 1961 in supersession of the Boards instructionNo.5/2014 dt.10.7.2014 regularising the monetary limitsfor filing the appeal by the Revenue before theTribunal, High Courts and Apex Court with an object forreducing litigation. Relevant para nos.3, 8, 9 and 10reads ad infra :- “3.Henceforth, appeals/SLPs shall not be filed incases where the tax effect does not exceed the monetarylimits given hereunder :- It is clarified that an appeal should not be filedmerely because the tax effect in a case exceeds themonetary limits prescribed above. Filing of appeal insuch cases is to be decided on merits of the case. 8.Adverse judgments relating to the following issuesshould be contested on merits notwithstanding that thetax effect entailed is less than the monetary limitsspecified in para 3 above or there is no tax effect: (a) Where the Constitutional validity of the provisionsof an Act or Rule are under challenge, or (b)Where Board's order, Notification, Instruction orCircular has been held to be illegal or ultra vires, or (c)Where Revenue Audit objection in the case has beenaccepted by the Department, or (d)Where the addition relates to undisclosed foreignassets/bank accounts. 9.The monetary limits specified in para 3 aboveshall not apply to writ matters and direct tax mattersother than Income tax. Filing of appeals in otherDirect tax matters shall continue to be governed byrelevant provisions of statute & rules. Further,filing of appeal in cases of Income Tax, where the taxeffect is not quantifiable or not involved, such as thecase of registration of trusts or institutions undersection 12 A of the IT Act, 1961, shall not be governedby the limits specified in para 3 above and decision tofile appeal in such cases may be taken on merits of aparticular case. 10.This instruction will apply retrospectively topending appeals and appeals to be filed henceforth inHigh Courts/Tribunals. Pending appeals below thespecified tax limits in para 3 above may bewithdrawn/not pressed. Appeals before the SupremeCourt will be governed by the instructions on thissubject, operative at the time when such appeal wasfiled.” 2.2The extract of the paragraphs referred to supra,clearly indicates that the limits specified in para 3may not apply to certain exceptions specified in para 8,at the same time para nos.9 and 10 of the Circular ifread conjointly, clearly envisages that the presentinstructions will apply retrospectively to all thepending appeals and appeals to be filed henceforth inHigh Courts/Tribunals, subject to exceptions where thetax effect even if is less than Rs.20 lac, can bepreferred in High Courts. 2.3Taking note of the CBDT Circular dt. 10/12/2015 andthe tax effect which indisputably in the instant case isless than Rs.20 lac, much less than what has beenprescribed for filing appeals before the High Courts,deserves to be dismissed as not pressed. However, it ismade clear that the substantial questions of law raisedin the instant appeal, if any, are left open to beexamined in an appropriate proceeding, if arises infuture. At the same time we consider it appropriate toobserve that if the appeal falls in any of theexceptions as referred to in the Circular dt.10/12/2015, the Revenue will be at liberty to move anapplication for recalling of the order if so advised. 3.Accordingly, in the light of the CBDT Circulardated 10.12.2015 the appeal stands dismissed. (VIJAY KUMAR VYAS)J. (K.S. JHAVERI)J.