Tax Appeal v. Deendayal Nagar Sahakari

1 mcas620-621-19dt.26.08.19 Santosh IN THE HIGH COURT OF BOMBAY AT GOA MISC. CIVIL APPLICATION NO. 62O OF 2019 IN TAX APPEAL NO.142 OF 2017 WITH MISC. CIVIL APPLICATION NO. 621 OF 2019IN TAX APPEAL NO.133 OF 2017 The Principal Commissioner of …..Income Tax, Panaji.Applicant. Versus Deendayal Nagar Sahakari …..Pathsaunstha Maryadit. Respondent. Mr. Amira Abdul Razaq, Standing Counsel for the Applicant. Mr. S. Karpe, Advocate for Respondent. Coram : M.S. Sonak & Nutan D. Sardessai, JJ.th August, 2019. P.C.:- By filing the aforesaid Misc. Civil Applications, thePrincipal Commissioner of Income Tax, seeks a recall of our orderdated 11th October, 2018, by which we had, in fact, disposed of theTax Appeals. 2. Our order dated 11th October, 2018, reads thus : “In these Appeals, the tax effect shown by the Appellant-Revenue is below 50.00 lakhs. In view of the CBDT 2 mcas620-621-19dt.26.08.19 Circular dated 11 July 2018, pursuant to the NationalLitigation Policy the Income Tax Department has decidedto withdraw the Appeals where the tax effect is below ₹50.00 lakhs. The Circular also had given the date of 20August 2018 to the Commissioner to take a decision. 2.In view of this policy, the Tax Appeals where placed onthe board on 28 August 2018, and 6 September 2018 toenable the Revenue to take written instructions. In fact, wehad suggested that they should form a team to examine thematters. The learned Standing Counsel states that nospecific instructions have been received from the Appellantso far, as to whether these Appeals also fall in any of theexceptions provided in the CBDT Circular. The tax effectin these Appeals is below the stipulated limit in theCircular. We had adjourned the matters from time to timealong with several others and this exercise cannot beundertaken again and again. Therefore, we dispose of theseAppeals, giving liberty to the Appellant to seek revival of theAppeals within a reasonable time, if upon examination it isfound that the Appeals fall in one of the exceptions and,therefore need to be pursued inspite of the tax effect beingbelow 50.00 lakhs. In view of the fact that the policy is to₹reduce the litigation, such a decision be taken within aperiod of six weeks. 3. With the above observations, the Appeals are disposedof. We are also informed that a Public Interest Litigation ispending in the Supreme Court challenging the CBDTCircular dated 11 July 2018. The disposal of these Appealsis also subject to the outcome of the said public interestlitigation." 3. These Misc. Civil Applications have been taken out inpursuance of the liberty granted by us by relying upon paragraph 5 of 3 mcas620-621-19dt.26.08.19 the Circular dated 11th July, 2018, which reads as follows : "... However, in case of a composite order of anyHigh Court or appellate authority, which involvesmore than one assessment year and common issues inmore than one assessment year, appeals shall be filedin respect of all such assessment years even if the tax effectis less than the prescribed monetary limits in any of the year(s), if it is decided to file appeal in respect of the year(s) in which tax effect exceeds the monetary limitprescribed..." 4. However, now, the CBDT has issued Circular No.17/2019dated 8th August, 2019, in terms of which the aforesaid paragraph 5of the Circular dated 11.7.2018 has been modified and substituted by the following : 3 mcas620-621-19dt.26.08.19 the Circular dated 11th July, 2018, which reads as follows : "... However, in case of a composite order of anyHigh Court or appellate authority, which involvesmore than one assessment year and common issues inmore than one assessment year, appeals shall be filedin respect of all such assessment years even if the tax effectis less than the prescribed monetary limits in any of the year(s), if it is decided to file appeal in respect of the year(s) in which tax effect exceeds the monetary limitprescribed..." 4. However, now, the CBDT has issued Circular No.17/2019dated 8th August, 2019, in terms of which the aforesaid paragraph 5of the Circular dated 11.7.2018 has been modified and substituted by the following : "5. The Assessing Officer shall calculate the tax effectseparately for every assessment year in respect of thedisputed issues in the case of every assessee. If, inthecase of an assessee, the disputed issues arise in morethan one assessment year, appeal can be filed in respectof such assessment year or years in which the tax effectin respect of the disputed issues exceeds the monetarylimit specified in para 3. No appeal shall be filed inrespect of an assessment year or years in which the taxeffect is less than the monetary limit specified in para 3.Further, even in the case of composite order of anyHigh Court or appellate authority which involves morethan one assessment year and common issues in morethan one assessment year, no appeal shall be filed inof an assessment in which the taxrespect year or years effect is less than the monetary limit specified in para 3.In case where a composite order/judgement involvesmore than one assessee. each assessee shall be dealt with 4 mcas620-621-19dt.26.08.19 separately." 5. Accordingly, it is quite clear that the Applicant, cannot anylonger rely upon paragraph 5 of the Circular dated 11.7.2018, butwill have to be governed by the Circular No.17/2019 dated 8thAugust, 2019 and the substituted paragraph 5. In terms of thesubstituted paragraph 5, there is no reason to institute appeals wherethe tax effect is below specified limit even if the subject-matter of thechallenge is a common order for several assessment years. 6.For the aforesaid reasons, we see no good ground to grantthe reliefs applied for in these Misc. Civil Applications. These Misc.Civil Applications are, therefore, dismissed. There shall be no orderas to costs. Nutan D. Sardessai, J. M.S. Sonak, J.