Case Law Details
PCIT Vs Gujarat Lease Financing Ltd. (Supreme Court of India)
Introduction: In a recent judgment, the Supreme Court of India addressed a case titled “PCIT vs. Gujarat Lease Financing Ltd.” where a Special Leave Petition (SLP) was dismissed concerning the recovery of income tax. The decision was primarily based on the amount of tax involved, which was lower than Rs.2 crores, following the Circular no. 17/2019 issued by the Central Board of Direct Taxes.
Detailed Analysis
1. Tax Amount Threshold: The central focus of this case was the tax amount involved. The Supreme Court decided not to proceed with the SLP due to the specific threshold set by the Circular no. 17/2019 . According to this circular, if the tax amount on which notice has been issued is less than Rs.2 crores, the case does not warrant further adjudication by the Court.
2. CBTD Circular 17/2019: The decision to dismiss the SLP was in line with Circular no. 17/2019 9 issued by the Central Board of Direct Taxes, Department of Revenue, Ministry of Finance. This circular establishes a clear framework for handling cases involving lower tax amounts and provides a basis for the Court’s decision.
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The question is, if there already exists a CBDT instruction that no SLP should be preferred if the amount of tax involved is less than Rs. 2 crores, how and who authorised the decision to move the SLP?