PCIT Vs Kabir Jewels Pvt. Ltd. (Gujarat High Court)
The Gujarat High Court considered a petition filed by the Revenue challenging the Income Tax Appellate Tribunal, Surat Bench order dated 10.02.2021 in MA No.26/SRT/2019, arising from ITA No.1829/Ahd/2016 for AY 2011-12. The Tribunal had rejected the Revenue’s miscellaneous application under Section 254(2) of the Income Tax Act, 1961, which sought rectification of its original order dated 16.11.2018.
The original appeal had been disposed of by the Tribunal on the ground of low tax effect, applying the monetary limit of Rs.20 lakhs prescribed for appeals before the Tribunal under Circular dated 11.07.2018, as modified by Circular dated 20.08.2018. The Revenue subsequently relied upon Clause 10(e) of the circulars, which provides an exception where an addition is based on information received from external sources in the nature of law enforcement agencies such as CBI, ED, DRI, SFIO and Directorate General of GST Intelligence (DGGI).
Before the High Court, the Revenue submitted that the Tribunal had erred in holding that the State VAT department did not fall within the expression “law enforcement agencies” because it was not specifically mentioned in Clause 10(e). The Revenue contended that the VAT department is an enforcement agency and should be covered by the exception, meaning that the monetary limit of Rs.20 lakhs would not apply.
