2024 (4) TMI 98 - SCH - Income Tax

Maintainability of petitions on the issue of low tax effect' - threshold limit for filing the appeal under Interest Tax Act - HELD THAT - Clause 5 of the Circular instruction dated 27.03.2000 though primarily applicable to cases under the Income Tax Act expressly mentions by way of example, wealth tax, gift tax and estate duty and insofar as the taxes which are not mentioned, use of the word etc. is significant. This implies that Circular instruction has mentioned only a few of the direct taxes which would be coming within the scope and ambit of the said Circular but insofar as those Acts, which are not specifically mentioned, the expression etc. is significant. We find that the said Circulars would also cover the Interest Tax Act as it is direct tax and can be read within the scope and ambit of the word Et Cetera . Admittedly, the Special Leave Petitions assail orders where the threshold limit is less than Rs.2,00,00,000/- (Rupees Two Crores). Special Leave Petitions are dismissed owing to low tax effect .

Summary

Issues involved: Maintainability of petitions based on 'low tax effect' as per Circulars issued by the Department.

Summary:
The respondent's counsel objected to the maintainability of the petitions based on the issue of 'low tax effect,' citing Circulars from various years. The petitioner's senior counsel argued that the threshold limit for filing appeals under the Circulars should not apply to the case concerning the Interest Tax Act. The Court considered the Circulars issued by the Department to limit litigation before Courts. Referring to a specific clause in a Circular instruction, it was noted that the Circulars cover various direct taxes, including those not explicitly mentioned. The Court found that the Interest Tax Act falls within the scope of the Circulars under the term 'Et Cetera.' Consequently, the Special Leave Petitions were dismissed due to 'low tax effect.' Pending applications were disposed of accordingly.