Principal Commissioner Of Income Tax, Mumbai 13 v. M/S Nawany Construction Co. Pvt Ltd

suresh 11-ITXA-1142.2015.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.1142 OF 2015 Principal Commissioner of IncomeTax, Mumbai 13 Vs.M/s Nawany Construction Co. Pvt Ltd .... Appellant .... Respondent Mr. Arvind Pinto for the Appellant.Mr. Sameer Dalal with Ms Namrata Kasale i/byMr. Vipul Joshi for the Respondent. CORAM: S.C. DHARMADHIKARI & B.P. COLABAWALLA, JJ. DATE : SEPTEMBER 10, 2018 P.C: 1.When this appeal was called out, Mr. Arvind Pinto,appearing on behalf of the Revenue in support of this appeal,made a very strange request. He said that this appeal raisesquestions of law which are indeed substantial questions of law.These questions are proposed on page 5 of the paper-book{questions 6.1 to 6.3}. 2.He would submit that such questions are already Page 1 of 5 suresh 11-ITXA-1142.2015.doc admitted by this Court and in that regard he would refer to anorder passed by this Court in Income Tax Appeal No.254 of2013. That Income Tax Appeal No.254 of 2013 has beenerroneously withdrawn. 3.A notice of motion (No.531 of 2018) has been filed in that appeal for the following two reliefs:- “A.That this Hon'ble Court be pleased to allow theApplicant, the successor-in-office, consequent to thereorganization of Charges to the Original Appellant toamend the Appeal iF required without reverification. B.That this Hon'ble Court be pleased to restore theAppeal that was admitted vide Order dated 22[nd] January2013, but wrongly withdrawn on the grounds that thistax effect was below the threshold as per CBDT CircularNo.21 of 2015 dated December 2015; since the Revenuewas not aware that there was another order of theTribunal dated the 26.11.2014 for the same assessmentyear.” 4.Thus now, that appeal is to be restored to the file of this Court and if that happens, even this appeal would have tobe admitted, is the submission. 5.We note a basic fallacy in this submission. Firstly, this Court has not restored Income Tax Appeal No.254 of 2013 suresh11-ITXA-1142.2015.doc to its file. It is only a request to restore that appeal which ispending but that will be subject to the orders of this Court.Secondly, though the tax effect in terms of the CBDT CircularNo.21 of 2015, dated 10-12-2015, is Rs.20,00,000/-, now thereis Revenue's another Circular dated 11-7-2018. That enhancesthe figure to Rs.50,00,000/-. 6.However, the latter Circular dated 11-7-2018contains para 10. The para 10 of this Circular reads as under:- “10.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 is 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.” 7.Mr. Pinto would submit that this is a conditional withdrawal permitted. The Revenue's Circular, therefore, cannot Page 3 of 5 suresh 11-ITXA-1142.2015.doc be read de hors or by omitting this condition. One of theconditions in Clause 10(c) of this Circular is, where the RevenueAudit Objection in the case has been accepted by theDepartment. 8.It is conceded that while seeking to restore IncomeTax Appeal No.254 of 2013 on the file of this Court, neither theRevenue's Circular dated 11-7-2018 is referred nor anycondition therein. If the condition now relied upon is withregard to the Revenue Audit Objection, then, mere raising of thisobjection in terms of this Circular is not enough. The Revenuewill have to point out that this audit objection has been acceptedby the Department. We have no such record before us. withdrawal permitted. The Revenue's Circular, therefore, cannot Page 3 of 5 suresh 11-ITXA-1142.2015.doc be read de hors or by omitting this condition. One of theconditions in Clause 10(c) of this Circular is, where the RevenueAudit Objection in the case has been accepted by theDepartment. 8.It is conceded that while seeking to restore IncomeTax Appeal No.254 of 2013 on the file of this Court, neither theRevenue's Circular dated 11-7-2018 is referred nor anycondition therein. If the condition now relied upon is withregard to the Revenue Audit Objection, then, mere raising of thisobjection in terms of this Circular is not enough. The Revenuewill have to point out that this audit objection has been acceptedby the Department. We have no such record before us. 9.In the circumstances, we find that this is an attemptto get over the binding Circulars and in any case we shall notallow the Revenue to get over them in this manner. TheCirculars continue to bind the Revenue and if they contain anyconditions, whether such conditions are attracted or not wouldhave to be proved and established by the Revenue. Once there is Page 4 of 5 suresh 11-ITXA-1142.2015.doc no such record before us, we do not countenance the oralrequest of Mr. Pinto. Consequently, we do not see any reason toentertain this appeal. It is dismissed. (B.P. COLABAWALLA, J.) (S.C. DHARMADHIKARI, J.) Digitally signedSureshby SureshJagdishJagdishSajnawatDate:Sajnawat2018.09.1211:33:30 +0530 Page 5 of 5