PCIT Vs Hans Chemicals Pvt. Ltd. (Bombay High Court)
Bombay High Court has dismissed an income tax appeal filed by the Principal Commissioner of Income Tax (PCIT) against Hans Chemicals Pvt. Ltd., ruling that the tax effect involved falls below the revised monetary limits set by the Central Board of Direct Taxes (CBDT). The decision, delivered recently, underscores the court’s consistent stance on applying updated monetary thresholds to pending appeals.
The appeal, filed on May 25, 2018, involved a tax effect of Rs. 74.69 Lakhs. At the time of filing, the monetary limit for appeals was Rs. 50 Lakhs, which the Revenue argued justified its initiation. However, the assessee contended that the current tax effect was less than Rs. 2 Crores, thereby warranting its disposal under the revised limits.
The Revenue further argued that the appeal fell within an exempted category as per a CBDT letter dated August 20, 2018. However, the High Court referenced its own precedents, including Principal Commissioner of Income Tax v/s Premier Industrial Corporation Ltd [(2025) 172 taxmann.com 289 (Bom)] and CIT v. V. M. Salgaonkar and Brothers (P) Ltd [2024] 169 taxmann.com 597 (Bombay). These rulings consistently hold that while revised monetary limits apply to pending appeals, exceptions carved out by CBDT circulars apply only prospectively, i.e., from their date of introduction.
