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2025 (2) TMI 453 - HC - Income TaxWithdrawal of pending Appeals below the monetary limits prescribed - As submitted though the monetary limits in these Appeals were less than Rs. 2 crores the revenue was not obliged to withdraw them or refrain from pursuing these appeals - HELD THAT - When it comes to withdrawal of pending Appeals below the monetary limits prescribed the circulars were specifically made applicable to pending Appeals. When it comes to exceptions the circulars provided that the decision could be taken by the revenue to institute Appeals below the monetary limits prescribed where the Appeals were covered by the exceptions set out in paragraph 3.1 of the circular dated 15 March 2024. Paragraph 10 of the circular dated 15 March 2024 states that this circular shall come into force from the date of its issue. This circular will apply to SLPs and appeals filed henceforth before the Supreme Court High Courts and Tribunals. On the holistic reading of the two circulars Mr. Pardiwalla s contention will have to be upheld. As in the case of V. M. Salgaonkar and Brothers 2024 (12) TMI 717 - BOMBAY HIGH COURT has expressly upheld such contention by expressly rejecting the argument identical to that which is advanced today before us. Even in V. M. Salgaonkar and Brothers 2024 (12) TMI 717 - BOMBAY HIGH COURT revenue had argued that the circulars must be read holistically and there was no scope for reading or construing one part retrospectively and the other prospectively. Thus based on the above two CBDT circulars and the decision of the Co-ordinate Bench in V. M. Salgaonkar and Brothers (supra) we dispose of these Appeals since Mr. Chhotaray maintains that he has no instructions to withdraw the same. This was the course of action adopted by the Coordinate Bench in V. M. Salgaonkar and Brothers (supra) and by the Rajasthan High Court in the case of Satish Kumar Agarwal (supra) 2024 (10) TMI 431 - RAJASTHAN HIGH COURT All these appeals are thus disposed of.
The High Court of Bombay considered a series of appeals in the matter of tax disputes. The core issue in these appeals revolved around the applicability of Circulars issued by the Central Board of Direct Taxes (CBDT) concerning the withdrawal of appeals where the tax effect is less than a specified monetary limit.The main legal questions considered were:1. Whether the CBDT Circulars, specifically Circular Nos. 05/2024 and 09/2024, should be interpreted retrospectively or prospectively?2. Whether the exceptions outlined in the Circulars allowed the revenue to continue pursuing appeals below the monetary limits specified?The Court analyzed the CBDT Circulars and the exceptions provided therein. Circular No. 05/2024 set monetary limits for filing appeals in tax matters, with exceptions for cases of organized tax evasion. Circular No. 09/2024 increased these monetary limits and specified that the modifications would apply to pending appeals as well as future ones.The Court considered the arguments presented by both parties. The Appellants argued that the revenue could rely on the exceptions in the Circulars to continue pursuing appeals below the monetary limits. On the other hand, the Respondents contended that the exceptions were prospective and could not be applied to pending appeals.The Court referred to the decisions in Commissioner of Income Tax V/s. V. M. Salgaonkar and Brothers (P.) Ltd. and Commissioner of Income Tax-I V/s. Satish Kumar Agarwal to support its reasoning. The Court noted that the Circulars differentiated between the application of monetary limits and exceptions, with the latter being prospective.Ultimately, the Court upheld the Respondents' argument, emphasizing that the exceptions in the Circulars could not be applied retrospectively to pending appeals. The Court cited the decision in V. M. Salgaonkar and Brothers to support its conclusion. As a result, the Court disposed of the appeals, as the Appellants did not have instructions to withdraw them.The Court granted the Appellants the liberty to seek revival of the appeals if they discovered that the tax effect exceeded the specified limit. However, this liberty was subject to a deadline of 31 December 2025. The Court also ordered a refund of court fees for the Appellants.In conclusion, the Court's decision was based on the interpretation of the CBDT Circulars and the principle that exceptions should be applied prospectively. The Court's ruling aligned with previous decisions and established clarity on the application of monetary limits and exceptions in tax appeals.
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