PCIT Vs Taha Wires Pvt. Ltd. (Gujarat High Court)
The Gujarat High Court allowed the Revenue’s writ petition and held that the Directorate General of Central Excise Intelligence (DGCEI) is a law enforcement agency for the purpose of Clause 10(e) of the CBDT Circular dated 11 July 2018, as modified by the Circular dated 20 August 2018. Consequently, the Tribunal had erred in excluding DGCEI from the exception to the monetary limits prescribed for filing departmental appeals.
The petition challenged the Income Tax Appellate Tribunal’s order dated 10 February 2021 rejecting the Revenue’s miscellaneous application filed under Section 254(2) of the Income Tax Act seeking rectification of its earlier order dated 23 August 2019.
The Revenue contended that the Tribunal had incorrectly interpreted Clause 10(e) of the CBDT Circulars by holding that DGCEI did not fall within the expression “law enforcement agencies.” It argued that DGCEI is an enforcement agency and should be treated as one of the agencies covered by Clause 10(e). Therefore, the case fell within the exception to the prescribed monetary limits for departmental appeals, making the tax effect threshold inapplicable.
The respondent submitted that subsequent CBDT Circulars dated 15 March 2024 and 17 September 2024 clarified that the enhanced monetary limits of ₹60 lakh for appeals before the Tribunal and ₹2 crore for appeals before the High Court apply only where assessments are reopened based on information relating to offences under other laws received from law enforcement or intelligence agencies referred to in Clause 10(e) of the Circular dated 11 July 2018, read with the Circular dated 20 August 2018, Clause 3.1(c) of the Circular dated 15 March 2024, and paragraph 5 of the Circular dated 17 September 2024. On that basis, dismissal of the petition was sought.
