Principal Commissioner Income ... vs M/S Gujarat Jhm Hotels Ltd.
2021 Latest Caselaw 754 Guj

        C/TAXAP/108/2020                                      ORDER




         IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                      R/TAX APPEAL NO. 108 of 2020

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         PRINCIPAL COMMISSIONER INCOME TAX, SURAT 1
                            Versus
                 M/S GUJARAT JHM HOTELS LTD.
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Appearance:
MRS KALPANAK RAVAL(1046) for the Appellant(s) No. 1
MR B S SOPARKAR(6851) for the Opponent(s) No. 1
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 CORAM: HONOURABLE MR. JUSTICE J.B.PARDIWALA
        and
        HONOURABLE MR. JUSTICE ILESH J. VORA

                            Date : 19/01/2021

                        ORAL ORDER

(PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA)

1. This is a Tax Appeal at the instance of the Revenue. The Tax effect involved in this case, as reported by the AO is Rs.71,80,858/­. Having regard to the Circular No. 03/2018 dtd 11.07.2018 issued by the CBDT, this Tax Appeal can be disposed of on the ground of low tax effect. However, an attempt is sought to be made by Ms. Raval, the learned Senior Standing Counsel appearing for the Revenue to submit that the circular referred to above would not be applicable in the appeals arising from the order passed under Section 263 of the Act, 1961.

2. We are afraid, the stance of the revenue as regard the non­ applicability of the circular, as referred to above, should fail in view of the order passed by a coordinate Bench of this Court in case of Principal Commissioner Income Tax, Valsad Vs. Vinodbhai Ranchhodbhai Parekh, in the Tax Appeal No. 643 of

C/TAXAP/108/2020 ORDER

2019 and allied appeals, decided on 10.02.2020. We quote the relevant observations made in para­11 and 12 respectively as under:

"11. In view of the aforesaid Circulars issued by the Central Board of Direct Taxes from time­to­time,the underlying policy of the Department is to reduce the litigation. So far as the matters arising out of the order under Section263 of the Act is concerned, the same pertain to invocation of the revisional powers of the Commissioner of Income tax for revising the assessment orders, which are erroneous or prejudicial to the interest of the Revenue. Therefore, when any order is passed under Section263 of the Act, the same would also be the order under the Income Tax Act, 1961. The Circular referred to above do not distinguish the order passed under Section263 or any other Section of the Act,1961, but it refers the monetary limits prescribed in the circulars itself and if any appeal is filed, which is not a writ­matter, then the monetary limits prescribed under the circular would apply and the Department is bound by such monetary limits and accordingly, the Department cannot pursue the matter, if the monetary limit prescribed in the circular is adhered­to.

12. In this context, the learned counsel Mr. Tushar Hemani has drawn attention of this Court to the order passed by the Division Bench in the Tax Appeal No.419 of 2009 and allied matters in the case of Commissioner of Income Tax Vs. Pravinchandra S. Shah dated 13th July, 2011. This Court while disposing of the appeals on the ground of monetary limits prescribed and penalty under Section271(1)(c) in similar situation held as under:

"Under the circumstances, we have ascertained whether the appeals under consideration would meet with the requirements of circular dated 15th May 2008 and in particular having regard to the provisions contained in para 5 thereof. We may notice that the issue involved in the appeals pertains to levy of penalty under section 271(1)

(c) of the Act. The law prescribes penalty ranging between 100 to 300 per cent of the amount of tax

C/TAXAP/108/2020 ORDER

evasion detected. In this group of appeals, even after taking maximum possible penalty imposable and taking combined total possible penalties for all appeals involving the same assessee and decided by the Tribunal by a common judgment, the same does not exceed the limit prescribed by the Board in its circular. To ascertain the tax effect, we have gone by the calculations provided by the Revenue through its learned counsel which are taken on record.

These appeals are, therefore, dismissed as involving low tax effect. It is clarified that the legal issues raised are not touched."

3. In view of the above, even if, we take the consolidated tax effect, it would not exceed the monetary limits prescribed in the Circular. This appeal is therefore dismissed on the ground of low tax effect.

(J. B. PARDIWALA, J)

(ILESH J. VORA,J) P.S. JOSHI