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IN THE HIGH COURT OF DELHI AT NEW DELHI
Rajiv Shakdher, Girish Kathpalia, JJ.
Principal Commissioner of Income Tax (central) – Appellant
Versus
Amit Gupta – Respondent
ITA 249 of 2023 & CM Nos.22088 of 2023
Decided On : 02-05-2023
Delay Condonation - Tax Effect Calculation - The court condoned the delay in re-filing the appeal and closed the appeal as the tax effect for the relevant assessment year was below the prescribed monetary limit.
Fact of the Case:
The appellant/revenue sought condonation of a 2-day delay in re-filing the appeal for Assessment Year 2017-18.
Finding of the Court:
The court found that the tax effect for the relevant assessment year was below the prescribed monetary limit and closed the appeal accordingly.
Issues: The main issue was the calculation of tax effect for the relevant assessment year and its impact on the filing of the appeal.
Ratio Decidendi: The court applied the circular no.3/2018 issued by the Central Board of Direct Taxes, which mandated the calculation of tax effect separately for every assessment year and the filing of appeals based on the tax effect in the relevant assessment year.
Final Decision: The court closed the appeal as the tax effect for the relevant assessment year was below the prescribed monetary limit, but kept the question of law raised by the appellant/revenue open for consideration in an appropriate matter.
JUDGMENT
[Physical Hearing/Hybrid Hearing (as per request)]
Rajiv Shakdher, J. (Oral)
CM No.22088/2023 [Application filed on behalf of the appellant seeking condonation of delay of 2 days in re-filing the appeal]
1. This is an application moved on behalf of the appellant/revenue seeking condonation of delay in re-filing the appeal.
1.1 According to the appellant/revenue, there is a delay of 2 days.
2. For the reasons given in the application, the delay is condoned.
3. The application is disposed of, in the aforesaid terms.
ITA 249/2023
4. This appeal concerns Assessment Year (AY) 2017-18.
5. What is noticed is that, even according to the appellant/revenue, the tax effect in this particular AY is only Rs.14,41,972/-.
6. Needless to state, tax effect has to be ascertained for each AY. This is evident upon a bare perusal of paragraph 5 of circular no.3/2018 dated 11.07.2018, issued by the Central Board of Direct Taxes (CBDT). For the sake of convenience, the said paragraph is extracted hereafter:
"5. The Assessing Officer shall calculate the tax effect separately for every assessment year in respect of the disputed issues in the case of every assessee. If, in the case of an assessee, the disputed issues arise in more than one assessment year, appeal can be filed in respect of such assessment year or years in which the tax effect in respect of the disputed issues exceeds the monetary limit specified in para 3. No appeal shall be filed in respect of an assessment year or years in which the tax effect is less than the monetary limit specified in para 3. In other words, henceforth, appeals can be filed only with reference to the tax effect in the relevant assessment year. 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/judgement involves more than one assessee, each assessee shall be dealt with separately."
7. In these circumstances, this appeal is closed in the aforesaid terms.
8. Needless to add, the closure of this appeal will not affect the lodging the appeals by the revenue concerning other AYs, where tax effect is above the prescribed threshold limit.
9. It goes without saying, the question of law raised by the appellant/revenue in this matter is kept open for consideration in an appropriate matter.
The main legal point established in the judgment is the requirement to calculate the tax effect separately for every assessment year and to file appeals based on the tax effect in the relevant assess....
The court has the discretion to condone delay in re-filing appeals and may rely on previous decisions to close appeals.
The court's decision was based on the lack of substantial question of law arising for consideration and the coverage of the issue by a previous court decision.
The principle of condonation of delay and the requirement for a substantial question of law to arise for consideration in an appeal.
The court's decision was based on the absence of a substantial question of law for consideration in the appeal.
The court's decision was influenced by its previous ruling on a similar issue, indicating the importance of consistency in judicial decisions.
The absence of substantial question of law can lead to the closure of appeals.
The circulars issued by CBDT at the relevant time are binding on the appellant/revenue, and the Tribunal's decision was based on the circular in force at the time.
The incriminating material found during the search must concern the assessment year in issue for the proceedings to be valid.
Clarity in penalty notices and the debatable nature of issues at the relevant time can influence the imposition of penalties.
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