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Pr. Commissioner of Income Tax - 10, Mumbai v/s Hotel Leela Venture Ltd.

    Income Tax Appeal No. 2206 of 2018

    Decided On, 02 April 2019

    At, High Court of Judicature at Bombay


    For the Appellant: Akhileshwar Sharma, Advocate. For the Respondent: --------

Judgment Text

Akil Kureshi, J.1. Revenue is in the appeal against the judgment of the Income Tax Appellate Tribunal ("the Tribunal" for short).2. Following question is formulated in the appeal for our consideration:-Whether on the facts and circumstances of the case and in law, the Tribunal was right in not confirming the disallowance of Rs. 48,11,915/- to book profit as per clause (f) to Explanation 1 under section 115JB of the Income Tax Act, 1961 overlooking the judgment of the Delhi High Court in case of CIT (Central Circle -II) vs. Geotze (India) Ltd in ITA No. 1179/2010 dated 9.12.2013?"3. The question itself would suggest that the tax effect involved is way below Rs. 50 Lakhs which is a threshold limit provided by CBDT in its latest Circular dated 11.7.2018 to enable the Revenue to carry any appeal before the High Court. In fact, the appeal memo itself calculates such tax at Rs. 15,61,230/-. We had, therefore, asked learned counsel for the Revenue at the outset about the maintainability of the appeal itself. As is well known, the legislature had inserted Section 268A of the Act in the Income Tax Act, 1961 ("the Act" for short) through Finance Act, 2008 w.e.f. 1.4.1999. Under sub-section (1) of Section 268A, the CBDT is empowered to issue orders, instructions or directions to the Income Tax Authorities, fixing such monetary limits as it may deed fit, for the purpose of regulating filing of appeal or application for reference by any Income Tax Authority under the provisions of Chapter XX of the Act pertaining to appeal or application for reference. Sub-section (2) of Section 268A of the Act provides that where in pursuance of the orders, instructions or directions issued under sub-section (1), an Income Tax Authority has not filed any appeal or application for reference on any issue in the case of an assesses for any assessment year, it shall not preclude such authority from filing an appeal or application for reference on the same issue of the same assesses for any other assessment year or any other assesses for the same or any other assessment year. Sub-section (3) of Section 268A of the Act clarifies that non filing of the appeal or application for reference would not imply that the Tax Authority has acquiesced in the decision on the disputed issue. Sub-section (5) of Section 268A provides that every order, instruction or direction which has been issued by the Board fixing monetary limits for filing an appeal or application for reference shall be deemed to have been issued under sub-section (1) and the provisions of subsections (2),(3) and (4) shall apply accordingly.4. Section 268A of the Act, thus, makes significant provisions in furtherance of the government's litigation reduction policy. Sub-section (1) of Section 268A as noted above empowers the Board to issue orders and directions prescribing monetary limits for filing appeals or seeking a reference. Sub-sections (2) and (3) would protect the Revenue against the argument of consistency or acquiescence.5. In exercise of such statutory powers, the Board has been issuing instructions from time to time. Latest set of instructions are contained in CBDT Circular dated 11.7.2018 which lays down the monetary limit at Rs. 50 Lakhs of tax effect to enable the Revenue to file appeal before the High Court against the judgment of the Income Tax Appellate Tribunal. All the Authorities of the Department are bound by these instructions and cannot prefer the appeal in disregard of such limits or directives. This Circular, of course, provides for certain exceptions. We are concerned with only the following:"...... However, in case of a composite order of any High Court or appellate Authority, which involves more than one assessment year and common issues in more than one assessment year, appeals shall be filed in respect of all such assessment years even if the tax effect is less than the prescribed monetary limits in any of the year(s), if it is decided to file appeal in respect of the year(s) in which tax effect exceeds the monetary limit prescribed. In case where a composite order / judgment involves more than one assesses, each assesses shall be dealt with separately."6. As per this provision, in case of a composite order of the Tribunal involving more than one assessment year and common issues, it would be open for the Revenue to prefer appeals in relation to all assessment years provided tax effect in one of the assessment year is higher than the monetary limit prescribed and the Revenue decides to carry the issue in appeal in such assessment years. In the present case,

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such facts are not involved. Learned counsel for the Revenue, however, argued that the order passed by the Appellate Commissioner gave rise to two separate appeals at the hands of the Revenue as well as the assesses. These appeals were decided separately by the Tribunal. The Revenue has decided to file appeal in both the cases. Such an instance, however, would not be covered by exception clause noted above contained in the CBDT Circular. This appeal is, therefore, dismissed on the ground of low tax effect.