Case Law Details
PCIT Vs Pratap Technocrats Private Limited (Rajasthan High Court)
The Rajasthan High Court dismissed the appeal filed by the Principal Commissioner of Income Tax (PCIT) against Pratap Technocrats Private Limited under Section 260A of the Income Tax Act. The dispute originated when PCIT challenged the deduction of ₹3.01 crore under Section 80JJAA, which the assessee had claimed for the Assessment Year 2018-19. The PCIT argued that the deduction should be disallowed since Form 10DA was not submitted with the income tax return. However, the Income Tax Appellate Tribunal (ITAT) had earlier ruled in favor of the assessee, accepting the deduction. The High Court upheld the ITAT’s decision, citing the Central Board of Direct Taxes (CBDT) Circular 9 of 2024, which states that appeals are not maintainable if the tax demand is less than ₹2 crore. Since the tax effect in this case was estimated to be around ₹1 crore, the court dismissed the appeal. The substantial legal question was left open for future consideration.
Assessee was represented by Sh. Sidharth Ranka, Adv.
FULL TEXT OF THE JUDGMENT/ORDER OF RAJASTHAN HIGH COURT
1. This appeal under Section 260A is filed against the order dated 07.2023 passed by learned Income Tax Appellate Tribunal, Jaipur (for short ‘Tribunal’).
2. The brief facts are that the respondent-assessee filed income tax return declaring total income of 24,87,27,450/- pertaining to Assessment Year 2018-2019. The case was taken up in scrutiny and the return income was accepted. The matter was taken by the Principal Commissioner Income Tax, Jaipur-I under Section 263 of the Income Tax Act, 1961 (for short ‘the Act’) on the ground that the assessee had not furnished Form 10DA along with the return, resultantly, the deduction of Rs.3,01,18,395/- claimed u/S 80JJAA ought to have been disallowed. The matter was remanded to the Assessing Authority to frame the assessment in view of the observations made by the Commissioner with regard to deduction under Section 80JJAA, the Tribunal accepted the appeal of the assessee. Hence the present appeal.
3. Learned counsel for the respondent raises a preliminary objection on the maintainability of the appeal in view of the Circular 9 dated 09.2024. The contention is that taking the case of the Department at the highest, the entire deduction even if disallowed, the tax demand would be less than two crores. It is further argued that non-filing of the Form 10DA along with the return, in itself, cannot be a ground for disallowing the deduction, has been decided in favour of the assessee by the jurisdictional Court. Learned counsel for the respondent submits that Circular 9 retains the exceptions provided in Circular 5 dated 15.03.2024. The argument is that the case in hand falls within the exception in Clause F of para 3.1 of Circular 5 of 2024. The appeal is maintainable as the order is passed under Section 263 of the Act and tax effect is not quantifiable.
4. The contention of the counsel for the appellant lacks merit. There is a distinction between ‘tax not quantifiable’ and ‘tax not quantified’.
5. In the present case, the contention of the counsel for the respondent that even taking the case at extreme, the disallowance of deduction would be of Rupees Three Crores approximately and the tax effect would be of Rupees One Crore odd approximately.
6. In view of the above, the appeal is dismissed as not maintainable in view of Circular 9 of 2024. The proposed substantial question of law is kept open.
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