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2024 (10) TMI 431 - HC - Income TaxMaintainability of appeal on low tax effect - monetary limits for filing appeal by department before the Tribunal, High Court and Supreme Court - HELD THAT - By Circular 9 of 2024 dated 17.09.2024, monetary limits specified in Circular 5 of 2024 were enhanced Circular 9 of 2024 albeit, enhanced the monetary limits but retained the exceptions in Para 3.1 3.2 of Circular 5 of 2024. From perusal of Para 5 of Circular 9 of 2024, it is evident that the circular shall apply to the appeals to be filed henceforth and also to the appeals pending before the Supreme Court, High Court and the Tribunal. Thereby making monetary limit specified in it and exceptions in Para 3.1 3.2 of Circular 5 of 2024 applicable to all the pending appeals. In other words, Circular 5 of 2024 was applicable prospectively but Circular 9 of 2024 while enhancing the monetary limit, retaining the exceptions of Circular 5 of 2024 made it applicable to the pending appeals also. The contention of learned counsel for the appellant that the Circular give retrorespective effect only to the monetary limit lacks merit. In case the argument is accepted, the result would be of adding words to the clear and plain language of Para 5 of Circular 9 of 2024. The reliance of the counsel for the appellant on the exceptions carved out in Circular 3 of 2018 cannot be sustained. Circular 3 of 2018 was superseded by Circular 5 and the exceptions of Circular 5 with the enhanced monetary limits in Circular 9 of 2024 were made applicable to pending appeals. The appeals are dismissed as non-maintainable in view of the Circular 9 of 2024.
Issues:
Interpretation of Circulars under Section 268A of the Income Tax Act, 1961 regarding monetary limits and exceptions for filing appeals. Analysis: The High Court addressed the issue involving the interpretation of Circulars issued by the Central Board of Direct Taxes (CBDT) under Section 268A of the Income Tax Act, 1961. The case revolved around the application of Circulars in pending appeals and appeals to be filed. The primary focus was on Circular No.3 of 2018, which was later modified by subsequent Circulars. The key contention was whether the exceptions carved out in Circulars were applicable to pending appeals after the issuance of Circular No.9 of 2024. The court examined the language of previous Circulars, such as Instruction No.5 of 2008, Instructions No. 3 of 2011, and No.5 of 2014, to understand the retrospective or prospective application of Circulars. Circular No.21 of 2015 was discussed, which specified monetary limits for appeals and exceptions for low tax effect cases. The court noted that Circular No.3 of 2018 superseded Circular 21 of 2015 and introduced new monetary limits and exceptions for filing appeals. The court highlighted the modifications made in Circulars, such as Circular 17 of 2019, which further enhanced monetary limits and clarified the effective date of the modifications. Circular 5 of 2024 was then introduced, which increased monetary limits and revised exceptions for filing appeals with low tax effect cases. The exceptions from Circular 3 of 2018 were no longer applicable in Circular 5 of 2024. The judgment focused on Circular 9 of 2024, which enhanced monetary limits while retaining the exceptions from Circular 5 of 2024. The court emphasized that Circular 9 of 2024 applied to pending appeals and appeals to be filed, making the monetary limits and exceptions applicable to all cases. The court rejected the argument that the Circular only gave retrospective effect to monetary limits, emphasizing that both the limits and exceptions were to be considered in pending appeals. Ultimately, the court dismissed the appeals as non-maintainable based on the provisions of Circular 9 of 2024. The judgment kept the substantial questions of law open for future consideration.
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