2019 (9) TMI 1649 - HC - Income Tax

Maintainability of appeal on low tax effects - as argued tax case 2019 (5) TMI 1944 - CHHATTISGARH HIGH COURT dismissed applying the Central Board Direct Taxes (in short the CBDT ) circular dated 11.07.2018 whereby the CBDT has directed that the Department Appeals may be filed on merits before the Income Tax Appellate Tribunal High Courts and SLPs/Appeals before the Supreme Court keeping in view the monetary limits for the High Courts. HELD THAT - Applying the circular the tax case was dismissed however the same circular also says that when the issue falls within the exception clause the same shall not be hit by the monetary limit. Referring to clause 10(e) of the circular it is argued that where the addition is based on information received from external sources the exception clause would apply and the ceiling of monetary limit would not apply. Having heard learned counsel for revenue and having seen the subject clause 10(e) it appears the same would apply where addition is based on information received from external sources in the nature of law enforcement agencies such as CBI/ ED/ DRI/ SFIO/ Directorate General of GST Intelligence (DGGI). In the case at hand the information on the basis of which this MCC has been filed was received from the Department of Sales Tax of the State of Maharashtra. Thus the said information having not emanated from the CBI/ ED/ DRI/ SFIO/ DGGI clause 10(e) would have no application. In our considered view the TAXC was rightly dismissed being hit by the Circular dated 11.7.2018 read with the amendment in the said circular vide subsequent CBDT circular dated 20.08.2018.

Summary

Issues Involved:
Application of CBDT circular dated 11.07.2018 in dismissing TAXC No. 11 of 2019 based on monetary limits for filing Department Appeals before different forums.

Analysis:

1. The judgment revolves around the dismissal of TAXC No. 11 of 2019 by applying the CBDT circular dated 11.07.2018, which directs filing Department Appeals within monetary limits before various tax forums. The circular specifies that exceptions exist where monetary limits do not apply, such as when the addition is based on information from external sources.

2. The circular's exception clause, specifically clause 10(e), exempts cases where additions are made based on information from law enforcement agencies like CBI, ED, DRI, SFIO, or DGGI. The argument presented in the case was that since the information leading to the case did not originate from these specified agencies but from the Department of Sales Tax of the State of Maharashtra, the exception clause would not apply.

3. The judges, after hearing the arguments, concluded that clause 10(e) of the circular would only be applicable when the addition is based on information from designated law enforcement agencies like CBI, ED, DRI, SFIO, or DGGI. As the information in this case was sourced from the State Sales Tax Department and not the specified agencies, the exception clause did not apply. Consequently, the dismissal of TAXC No. 11 of 2019 was deemed appropriate under the CBDT circular dated 11.07.2018 and its subsequent amendment dated 20.08.2018.

4. The court's considered view was that the dismissal of TAXC No. 11 of 2019 was justified as it fell within the ambit of the Circular dated 11.07.2018 and the subsequent amendment on 20.08.2018. The judges found that the case did not meet the criteria for exemption from monetary limits as per the circular, leading to the dismissal of the case.

5. Ultimately, the judgment concluded that the case was rightly dismissed based on the CBDT circular's provisions, and the Miscellaneous Civil Case (MCC) was accordingly dismissed.