Income Tax Appeal Rejected Due to Low Tax Effect & Lack of Exceptional Circumstances

PCIT Vs Ahinsha Management Private Limited (Calcutta High Court)

The Calcutta High Court dismissed an appeal filed by the Income Tax Department where the tax effect was Rs.26,17,600, below the monetary threshold prescribed under CBDT Circular No.9/2024 and Circular No.5/2024. Although the Revenue argued that the matter fell within the “exceptional category” under paragraph 3.1(h) of the circular, the Court found that no specific exceptional clause applicable to the case had been clearly identified. While condoning a delay of 204 days in filing the appeal, the Court held that there was no reason to entertain the matter since the tax effect was below Rs.2 crores and the Revenue failed to substantiate its claim for exception.

FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT

The Court: Affidavit of service filed today be kept with the record.

Heard learned counsel appearing for the appellant.

No one appears for the respondent/assessee.

There is a delay of 204 days in filing the appeal. We are satisfied with the explanation offered for not preferring the appeal within time. Therefore, the delay is condoned. The application being GA/1/2026 is allowed.

Learned counsel for the appellant submits that the tax effect in this case is Rs.26,17,600/- which is below the tax limit as prescribed in the CBDT Circular No. 9/2024 dated 17^th September, 2024 and Circular No.5 of 2024 dated 15^th March, 2024 but the case falls within the exceptional category under para 3.1(h) as per CBDT Circular No. 5 of 2024 dated 15t^h March, 2024.

We have perused the application, the assessment order, appellate order of the learned Commissioner of Income Tax and the order of the learned Tribunal dated 24.02.2025 for the Assessment Year 2010-2011. We do not find any reason to entertain this appeal where the appellant has not clearly suggested which exceptional clause as read in para 3.1(h) as per CBDT Circular No.5 of 2024 dated 15th March, 2024 is applicable in the present appeal. As such, this appeal and the connected application being GA/2/2026 are dismissed as the tax effect in this matter is below Rs. 2 crores.