Income Tax Appeal v. M/S. Lakhani Foot Care Ltd

--- 1 --- HIGH COURT OF MADHYA PRADESH : BENCH AT INDORE D.B.: HON'BLE MR. S. C. SHARMA ANDHON'BLE MR. SHAILENDRA SHUKLA, JJ INCOME TAX APPEAL No. 115 / 2016THE PRINCIPAL COMMISSIONER OF INCOME TAXVs. M/S. LAKHANI FOOT CARE LTD. * * * * *O R D E R(31/10/2019) PER : S. C. SHARMA, J:- The present appeal has been filed u/S. 260A of the Income TaxAct 1961 by the Commissioner of Income Tax Indore against theorder passed by the Income Tax Appellate Tribunal. The CentralBoard of Direct Taxes has issued a circular No. 3/2018 fixing themonetary limit for filing of appeals before the High Courts andbefore the Supreme Court. However, certain appeals are to bedecided on merits. Paragraph 10 of the Circular dated 11/07/2018reads as under: Para 10 of the Circular dated 11/7/2018 reads as under : 10.Adverse judgments relating to the following issues should becontested on merits notwithstanding that the tax effect entailed is lessthan the monetary limits specified in para 3 above or there is no taxeffect :contested on merits notwithstanding that the tax effect entailed is lessthan the monetary limits specified in para 3 above or there is no taxeffect : (a)Where the Constitutional validity of the provisions of an Act orRule is under challenge, or(b)Where Board's order, Notification, Instruction or Circular hasbeen held to be illegal or ultra vires, or(c)Where Revenue Audit objection in the case has been acceptedby the Department, or(d)Where the addition relates to undisclosed foreign assets / bankaccounts.Rule is under challenge, or(b)Where Board's order, Notification, Instruction or Circular hasbeen held to be illegal or ultra vires, or(c)Where Revenue Audit objection in the case has been acceptedby the Department, or(d)Where the addition relates to undisclosed foreign assets / bankaccounts. That the circular no. 3/2018 was further revised by the circular dated 20/08/2018 and paragraph 10 was amended as under : 3.Para 10 of the said Circular provides that adverse judgmentsrelating to the issues enumerated in the said para should be contested onmerits notwithstanding that the tax effect entailed is less than therelating to the issues enumerated in the said para should be contested onmerits notwithstanding that the tax effect entailed is less than the --- 2 --- monetary limits specified in para 3 thereof or there is no tax effect. Para10 of the Circular No.3 of 2018 dated 11/7/2018 is hereby amended asunder: 10.Adverse judgments relating to the following issues should becontested on merits notwithstanding that the tax effect entailed is lessthan the monetary limits specified in para 3 above or there is no taxeffect :(a)Where the Constitutional validity of the provisions of an Act orRule is under challenge, or(b)Where Board's order, Notification, Instruction or Circular hasbeen held to be illegal or ultra vires, or(c)Where Revenue Audit objection in the case has been acceptedby the Department, or(d)Where the addition relates to undisclosed foreign income /undisclosed foreign assets (including financial assets) / undisclosedforeign bank account.(e)Where addition is based on information received from externalsources in the nature of law enforcement agencies such as CBI / ED /DRI / SFIO / Directorate General of GST Intelligence (DGGI).(f)Cases where prosecution has been filed by the Department andis pending in the Court. Thereafter another circular was issued on 08/08/2019 and themonetary limit was enhanced to Rs. 1.00 crore in respect of HighCourt. A further clarificatory circular was issued on 6[th] September,2019 and the Department has been permitted, irrespective ofvaluation, to file an appeal on merits in cases involved in organizedtax evasion activity (Circular dated 6[th] September, 2019). Thereafter another circular was issued on 08/08/2019 and themonetary limit was enhanced to Rs. 1.00 crore in respect of HighCourt. A further clarificatory circular was issued on 6[th] September,2019 and the Department has been permitted, irrespective ofvaluation, to file an appeal on merits in cases involved in organizedtax evasion activity (Circular dated 6[th] September, 2019). The present appeal is covered under the circular issued by theDepartment and the learned counsel for the appellant prays forwithdrawal of the present appeal. The prayer is allowed. The appealis dismissed as withdrawn. However, the question of law is left open. (S. C. SHARMA)J U D G E (SHAILENDRA SHUKLA)J U D G E KR Digitally signed by Kamal Rathor Date: 2019.11.04 15:40:47 +05'30'