D.b.income Tax Appeal v. M/S Bikaner Distributors P Ltd

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHANBENCH AT JAIPUR D.B.INCOME TAX APPEAL NO. 71 / 2011C I T JAIPUR ----Appellant Versus M/S BIKANER DISTRIBUTORS P LTD ----Respondent __________________________________________ For Appellant :Mr. Anuroop Singhi __________________________________________ HON'BLE MR. JUSTICE K.S.JHAVERI HON'BLE MR. JUSTICE DINESH MEHTAJudgment Per Hon’ble Mr. Jhaveri, J. 02/12/2016 Instant appeal is directed against order of theIncome Tax Appellate Tribunal and indisputably thetax effect as brought to our notice, is less thanRs.20 lac. A 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 Boardsinstruction No.5/2014 dt.10.7.2014 regularising themonetary limits for filing the appeals by the Revenuebefore the Tribunal, High Courts and Apex Court withan object for reducing litigation. Relevant paranos.3, 8, 9 and 10 reads ad infra :- “3.Henceforth, appeals/SLPs shall not be filed incases where the tax effect does not exceed themonetary limits given hereunder :- S.Appeals in Income-taxMonetary Limit (inNo.mattersRs.)1Before Appellate Tribunal10,00,000/-2Before High Court20,00,000/-3Before Supreme Court25,00,000/- It is clarified that an appeal should not be filedmerely because the tax effect in a case exceeds themonetary limits prescribed above. Filing of appealin such cases is to be decided on merits of thecase. 4.xxxxxxxxx5.xxxxxxxxx6.xxxxxxxxx7.xxxxxxxxx 8.Adverse judgments relating to the followingissues should be contested on merits notwithstandingthat the tax effect entailed is less than themonetary limits specified in para 3 above or thereis no tax effect: (a) Where the Constitutional validity of theprovisions of an Act or Rule are under challenge, or(b)WhereBoard'sorder,Notification,Instruction or Circular has been held to be illegalor ultra vires, or (c)Where Revenue Audit objection in the casehas been accepted by the Department, or (d)Where the addition relates to undisclosedforeign assets/bank accounts. 9.The monetary limits specified in para 3 aboveshall not apply to writ matters and direct taxmatters other than Income tax. Filing of appeals inother Direct tax matters shall continue to begoverned by relevant provisions of statute & rules.Further, filing of appeal in cases of Income Tax,where the tax effect is not quantifiable or notinvolved, such as the case of registration of trustsor institutions under section 12 A of the IT Act,1961, shall not be governed by the limits specifiedin para 3 above and decision to file appeal in suchcases may be taken on merits of a particular case. 10.This instruction will apply retrospectively topending appeals and appeals to be filed henceforthin High 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.” (3 of 4 ) The extract of the paragraphs referred to supra,clearly indicates that the limits specified in para 3may not apply to certain exceptions specified in para8, at the same time para nos.9 and 10 of the Circularif read conjointly, clearly envisages that thepresent instructions will apply retrospectively toall the pending appeals and appeals to be filedhenceforth in High Courts/Tribunals, subject toexceptions where the tax effect even if is less thanRs.20 lac, can be preferred in High Courts. (3 of 4 ) The extract of the paragraphs referred to supra,clearly indicates that the limits specified in para 3may not apply to certain exceptions specified in para8, at the same time para nos.9 and 10 of the Circularif read conjointly, clearly envisages that thepresent instructions will apply retrospectively toall the pending appeals and appeals to be filedhenceforth in High Courts/Tribunals, subject toexceptions where the tax effect even if is less thanRs.20 lac, can be preferred in High Courts. Taking note of the CBDT Circular dt. 10/12/2015and the tax effect which indisputably in the instantcase is less than Rs.20 lac, much less than what hasbeen prescribed for filing appeals before the HighCourts, deserves to be dismissed as not pressed.However, it is made clear that the substantialquestions of law raised in the instant appeal, ifany, are left open to be examned in an appropriateproceeding, if arises in future. At the same time weconsider it appropriate to observe that if the appealfalls in any of the exceptions as referred to in theCircular dt. 10/12/2015, the Revenue will be atliberty to move an application for recalling of theorder if so advised. Accordingly, in the light of the CBDT Circulardated 10.12.2015 the appeal is dismissed as notpressed. Liberty to revive in case of difficulty. (DINESH MEHTA)J.