DCIT Vs Parv Buildcon (Chhattisgarh High Court)
Summary: The Chhattisgarh High Court, in Deputy Commissioner of Income Tax Vs Parv Buildcon, disposed of a departmental income-tax appeal on the ground that the tax effect involved was below the revised monetary threshold of ₹2 crore prescribed for appeals before High Courts. The appeal was filed by the Deputy Commissioner of Income Tax, Centralized Processing Centre, Bengaluru, against Parv Buildcon. During the hearing, counsel representing the Income Tax Department informed the Court that the Ministry of Finance had issued a circular dated 17 September 2024 revising the monetary limits for departmental appeals. Under the revised framework, the threshold for filing appeals before the Income Tax Appellate Tribunal was increased to ₹60 lakh, before High Courts to ₹2 crore and before the Supreme Court to ₹5 crore. Since the tax liability involved in the present case was less than ₹2 crore, departmental counsel requested that the appeal be disposed of in accordance with the revised monetary limits. The High Court found the request fair and reasonable and examined the relevant provisions of the circular.
The Court reproduced the circular’s provisions clarifying that the revised monetary thresholds apply to income-tax appeals, including cases concerning TDS and TCS, subject to the specified exceptions under paragraphs 3.1 and 3.2 of CBDT Circular No. 5/2024 dated 15 March 2024. The circular further provides that appeals should not be filed merely because the tax effect exceeds the prescribed threshold; the decision must also be justified on the merits, keeping in view the objective of reducing unnecessary litigation and providing certainty to taxpayers. Importantly, the revised limits apply not only to future appeals but also to appeals pending before the Supreme Court, High Courts and tribunals, which may accordingly be withdrawn. The circular was issued under Section 268A of the Income-tax Act, 1961. Applying paragraph 5 of the circular dated 17 September 2024, the Chhattisgarh High Court held that the departmental appeal involving tax liability below ₹2 crore could be disposed of under the revised monetary-limit policy. Accordingly, the Court disposed of the tax case without adjudicating the substantive income-tax issues involved in the underlying dispute.
FULL TEXT OF THE ORDER OF CHHATTISGARH HIGH COURT
1. When case is taken for hearing and learned counsel for the appellant would submit that the Government of India, Ministry of Finance has issued a new circular dated 17.09.2024, in which monetary limits for filing Income Tax Appeals by the department before the High Court has been enhanced to Rs.2 Crores, whereas in the present case the tax liability of assess is less than Rs.2 Crore. Therefore, in light of aforesaid circular dated 17/09/2024, the present appeal may be disposed of finally.
2. The said prayer appears to be fair and reasonable.
3. For ready reference, relevant paragraphs of said circular dated 17/09/2024 is quoted hereinbelow:
“1.Reference is invited to Circular No 5/2024 (F.No.279/Misc.142/2007-ITJ(Pt))dated15.03.2024 of Central Board of Direct Taxes (the ‘Board’) vide which monetary limits for filing of income tax appeals by the Department before Income Tax Appellate Tribunal, High Courts and SLP/appeals before Supreme Court have been specified. Further, exceptions to the monetary limits were also specified vide paras 3.1 and 3.2 of the said Circular.
2. As a step towards management of litigation, it has been decided by the Board to revise the monetary limits for filing of appeals in Income-tax cases as stated in Para 4.1 of the aforementioned Circular as follows:-
| S.No. | Appeals/SLPs in Income-tax Matters | Monetary Limit (Tax effect in Rs.) |
|---|---|---|
| 1. | Before Income Tax Appellate Tribunal | 60 Lakh |
| 2. | Before High Court | 2 crore |
| 3. | Before Supreme Court | 5 crore |
3. Monetary limits given in paragraph 2 above with regard to filing appeal/SLP shall be applicable to all cases including those relating to TDS/TCS under the Income-tax Act, 1961 with exceptions as per paras 3.1 and 3.2 of Circular No 5/2024 dated 15.03.2024, where the decision to appeal/file SLP shall be taken on merits, without regard to the tax effect and the monetary limits.
4. It is clarified that an appeal should not be filed merely because the tax effect in a case exceeds the monetary limits prescribed above. Filing of appeal in such cases is to be decided on merits of the case. The officers concerned shall keep in mind the overall objective of reducing unnecessary litigation and providing certainty to taxpayers on their Income-tax assessments while taking a decision regarding filing an appeal.
5. The modifications shall come into effect from the date of issue of this Circular. This Circular will apply to SLPs/appeals to be filed henceforth in SC/HCs/Tribunal. It shall also apply to the SLPs/ appeals pending before Supreme Court/High Courts/Tribunal, which may accordingly be withdrawn.
6. The above may be brought to the notice of all concerned.
7. This issues under section 268A of the Incometax Act, 1961.
8. Hindi version will follow.”
4. In view aforesaid submission of learned counsel for the appellant where monetary limit (tax liability) in the present case is less than Rs.2 Crores therefore, in light of aforesaid circular (Para-5) dated 17/09/2024, the instant Tax Case stands disposed of.
