Principal Director of Income-tax (Investigation) Vs Prakash Nimmagadda (Telangana High Court)
Summary: The High Court for the State of Telangana at Hyderabad, comprising Hon’ble Sri Justice P. Sam Koshy and Hon’ble Sri Justice Suddala Chalapathi Rao, decided I.T.T.A. No. 4 of 2026 on 8 January 2026. The appeal was preferred by the Principal Director of Income Tax (Investigation), Hyderabad against the order dated 21 April 2025 passed by the Income Tax Appellate Tribunal, Hyderabad “B” Bench, in B.M.A. No. 1/Hyd/2024 for Block Assessment Year 2019-20. The Tribunal order arose from the order of the Commissioner of Income Tax (Appeals)-11, Hyderabad dated 28 June 2024, which in turn arose from the order of the Assistant Director of Income Tax, Hyderabad dated 26 March 2022.
The matter concerned a penalty imposed under Section 43 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. During the hearing, the Court found that the tax effect arising in the case was only Rs.10,00,000/-, being the penalty imposed by the appellant under Section 43 of the Black Money Act.
The Court considered CBDT Circular No. 5 of 2024, under Section 268A of the Income-tax Act, 1961, and noted the monetary limit referred to by the Court as having been raised from Rs.1 crore to Rs.2 crores for departmental appeals before the ITATs, High Courts and Supreme Court. The tax effect of Rs.10,00,000/- was therefore much below the monetary limit prescribed under the said Circular. The Court was consequently of the considered opinion that, in terms of Circular No. 5 of 2024, the instant appeal may not be sustainable and accordingly dismissed the appeal. The miscellaneous petitions pending, if any, were directed to stand closed.
The order records that the appeal was an Income Tax Tribunal Appeal under Section 260A of the Income-tax Act, 1961 and that the underlying penalty proceedings related to Section 43 of the Black Money Act. The High Court’s final order dated 8 January 2026 records: “Dismissing the ITTA Without costs.”
FULL TEXT OF THE JUDGMENT/ORDER OF TELANGANA HIGH COURT
Heard Mr. N.Praveen Reddy, Senior Standing Counsel for the Income Tax Department appearing for the appellant.
2. In the course of the hearing, it has been found that the tax effect arising in the instant case is only Rs.10,00,000/- (Ten Lakhs Only) that too by way of penalty imposed by the appellant under Section 43 of Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. However, perusal of Circular No.5 of 2024, where the monetary limit fixed by the department in the course of preferring an appeal before the ITTA’s, High Courts and Supreme Court has been raised from Rs.1 crore to Rs.2 crores. We find that the tax effect in instant case is only Rs.10,00,000/- which is much below the monetary limit prescribed under the said Circular.
3. In view of the same, we are of the considered opinion that in terms of the Circular No.5 of 2024, the instant appeal may not be sustainable and the same accordingly stands dismissed.
Consequently, miscellaneous petitions pending, if any, shall stand closed.
