Ita/18/2021 Of Principal Commissioner Of Income Tax v. M/S Surya Textech

IN THE HIGH COURT OF HIMACHAL PRADESH, AT SHIMLA ON THE 5[th] DAY OF OCTOBER, 2021 BEFORE HON’BLE MR. JUSTICE TARLOK SINGH CHAUHAN &HON’BLE MS. JUSTICE JYOTSNA REWAL DUAINCOME TAX APPEAL No.18 of 2021 -Between: PR. COMMISSIONER OF INCOME TAX-1,AAYKAR BHAWAN, SECTOR 17-E,CHANDIGARH. ..….APPELLANT. (BY SH. VINAY KUTHIALA,SENIOR ADVOCATE WITH SH. DIWAN SINGH NEGI,ADVOCATE) AND M/S SURYA TEXTECH,VILL-RAMPUR JATTAN,P.O. KALA AMB, NAHAN,DISTT. SIRMOUR, (H.P)THROUGH ITS PARTNERSSH. VIKAS KANSAL. ......RESPONDENT. This appeal coming on for admission before notice this day, Hon’ble Mr. Justice Tarlok SinghChauhan, delivered the following:- J U D G M E N T By way of instant appeal, the Appellant-Department seeks to assail the order dated 28.05.2020 passed by the Income Tax Appellate Tribunal, Chandigarh,(for short ‘ITAT’) in ITA No. 1222/Chd/2019. 2.The respondent-assessee-firm vide its return of income for the Assessment Year 2012-13 declared incomeof Rs.7,36,735/- after claiming deduction ofRs.1,22,83,721/- under Section 80IC of the Income Tax Act,1961 (for short ‘the Act’). The case of assessee wasselected for scrutiny and accordingly, vide order dated27.03.2015 assessment under Section 143 (3) of the Actwas completed. Subsequently, assessment was also framedunder Section 143 (3) read with Section 147 of the Act videorder dated 04.12.2018 and income of the assessee wasassessed at Rs.13,81,278/- by disallowing deduction underSection 80IC to the extent of income of Rs. 6,44,538/-. 3.The assessee assailed the above notedassessment order before CIT(A) Shimla by way of Appeal No.IT/204/18-19/Sml. The appeal of assessee was allowed videorder dated 28.06.2019. 4.The Appellant-Department assailed the order ofCIT(A), Shimla, before the ITAT, Chandigarh in Appeal No.1222/Chd/2019. The appeal of the Appellant-Department has been dismissed by the ITAT, Chandigarh vide impugnedorder. 5.The Appellant-Department has assailed theimpugned order dated 28.05.2020 passed by the ITAT,Chandigarh on the ground that the appeal was dismissed bythe ITAT, Chandigarh only on the ground that the tax effectwas much less than the limit prescribed by the Board inCircular No. 17/2019 dated 08.08.2019, issued by the CBDT.The Appellant-Department has further raised the grievancethat the ITAT, Chandigarh had failed to consider the merits ofthe case. According to Appellant-Department, the abovenoted circular was not applicable in view of Clause 10 (c) ofthe CBDT Circular No. 3/2018 dated 11.07.2018. 6.We have heard learned counsel for the partiesand have also gone through the records of the case. 7.The controversy can be summed up in narrow encompass. The issue for adjudication is whether theAppellant-Department can press into service the exemptionClause 10 (c) of Circular No. 3/2018 dated 11.07.2018 issuedby the CBDT. 8.Perusal of impugned order passed by the ITATreveals that it has taken into consideration the Circular No.17/2019 dated 08.08.2019 issued by the CBDT, which reads as under: “Circular No. 17 of 2019Date – 8[th] August, 2019 Further Enhancement of Monetary limits for fling ofappeals by the Department before Income TaxAppellate Tribunal, High Courts and SLPs/appeals–before Supreme Court Amendment to Circular 3 of–2018 Measures for reducing litigation. Circular No. 3/2018 dated 11[th] July 2018 has beenreplaced by circular No. 17/2019 dated 8[th] August2019 to enhance Monetary limits for filing of appealsby the Department before Income Tax AppellateTribunal, High Courts and SLPs/appeals beforeSupreme Court for reducing litigation. Appeals/SLPsinMonetary LimitMonetary LimitIncome-tax matters(Rs.)(Rs.) (Revised(Previous Limit)Limit)BeforeAppellate20,00,00050,00,000TribunalBefore High Court50,00,0001,00,00,000BeforeSupreme1,00,00,0002,00,00,000Court “Circular No. 17 of 2019Date – 8[th] August, 2019 Further Enhancement of Monetary limits for fling ofappeals by the Department before Income TaxAppellate Tribunal, High Courts and SLPs/appeals–before Supreme Court Amendment to Circular 3 of–2018 Measures for reducing litigation. Circular No. 3/2018 dated 11[th] July 2018 has beenreplaced by circular No. 17/2019 dated 8[th] August2019 to enhance Monetary limits for filing of appealsby the Department before Income Tax AppellateTribunal, High Courts and SLPs/appeals beforeSupreme Court for reducing litigation. Appeals/SLPsinMonetary LimitMonetary LimitIncome-tax matters(Rs.)(Rs.) (Revised(Previous Limit)Limit)BeforeAppellate20,00,00050,00,000TribunalBefore High Court50,00,0001,00,00,000BeforeSupreme1,00,00,0002,00,00,000Court •The Assessing OfÏcer shall calculate the taxeffect separately for every assessment year inrespect of the disputed issues in the case of everyassessee. If, in the case of an assessee, the disputedissues arise in more than one assessment year,appeal can be filed in respect of such assessmentyear or years in which the tax effect in respect of thedisputed issues exceeds the monetary limit. Noappeal shall be filed in respect of an assessment yearor years in which the tax effect is less than themonetary limit. •Further, even in the case of composite order ofany High court or appellate authority which involvesmore than one assessment year and common issues in more than one assessment year, no appeal shall befiled in respect of an assessment year or years inwhich the tax effect is less than the monetary limit. • In case where a composite order/judgmentinvolves more than one assessee, each assessee shallbe dealt with separately.” 9.It is not in dispute that the above noted Circular No. 17/2019 is extension of Circular No. 3/2018 issued by theCBDT whereby certain modifications have been made in theoriginal circular especially in respect of enhancement ofrevision of monetary limits for appeals/SLPs in income taxmatters.10.It is evident from the impugned order that theAppellant-Department was duly represented at the time ofhearing of appeal before the ITAT, Chandigarh. No suchground had been raised on behalf of the Appellant-Department before the ITAT, Chandigarh requiring the saidTribunal to decide the matter on merits in view of Clause10 (c) of the Circular No. 3/2018. 11.Once the Appellant-Department had not raisedthe plea of applicability of Clause 10 (c) of CBDT Circular No.3/2018, it cannot be allowed to raise such plea in the presentappeal. 12.The ITAT has correctly held the appeal before it to be not maintainable in view of clear mandate of CircularNo. 17/2019. Same principle applies to the filing of presentappeal. Hence, no substantial question of law arises fordetermination by this Court. 13.No other infirmity has been pointed out in theimpugned order. 14.In the light of above discussion, we find no meritin the appeal and the same is dismissed, so also the pendingapplication(s), if any. (Tarlok Singh Chauhan) Judge (Jyotsna Rewal Dua) Judge 5[th] October, 2021.(krt)