Bombay High Court: The instant appeal was filed by the Revenue (‘appellant’) and was properly instituted. However, the assessee prayed for it to be withdrawn on account of Central Board of Direct Taxes (‘CBDT’) Circular No. 5 of 2024 (‘2024 Circular’). The Division Bench of M.S. Sonak and Jitendra Jain, JJ., observed that since the 2018 Circular was superseded by the 2024 Circular and the tax effect involved was less than Rs 2 crore, therefore the appeal stood disposed of on account of the tax effect.
The tax effect in the present appeal was Rs 12,11,053. It was submitted by the appellant that the appeal filed on 26-9-2018 was properly instituted as it fell under an exception as provided in Paragraph 10(c) of the CBDT Communication dated 20-8-2018 read with the 2018 Circular dated 11-7-2018, and that the appeals where the department had accepted the revenue audit objection, were not liable to be withdrawn based on the tax effect involved. It further submitted that the appeal did not involve any estimation of additions on account of bogus purchases.
However, the assessee contended that the 2024 Circular dated 15-3-2024 superseded both CBDT communication as well as the 2018 Circular. Therefore, there was no similar exception existing upon which the appellant could rely. It also submitted that the ceiling of tax effect was raised to Rs 2 crore by the 2024 Circular and since the tax effect involved was admittedly below the limit, the appeal should not be allowed.
The main issue involved in the case was whether the appeal which initially fell under the exception to the Circular prescribing monetary limits for filing of appeals was now liable to be disposed of as withdrawn considering the 2024 Circular. The Court observed that the exception in Paragraph 10 (c) in the CBDT communication read with 2018 Circular was not reflected in the 2024 Circular, which also raised the tax effect ceiling to Rs. 2 crores, therefore, even though this appeal might have been properly instituted, it was liable to be dismissed. Consequently, the Court, deciding in favor of the assessee, ordered the appeal to be disposed of on account of the tax effect.
[CIT v. Sulzer Pumps India Ltd., IT Appeal No. 32 of 2019, decided on 16-4-2025]
Advocates who appeared in this case:
For the Appellant: Suresh Kumar.
For the Respondent: Apurva Chaudhary.
