Between vs M/S Hycron Electronics
2021 Latest Caselaw 5753 HP

                             REPORTABLE/NON-REPORTABLE
    IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA
                 ON THE 15th DAY OF DECEMBER, 2021
                              BEFORE




                                                            .

          HON'BLE MR. JUSTICE TARLOK SINGH CHAUHAN
                           &
            HON'BLE MR. JUSTICE SATYEN VAIDYA.





                      ITA NO. 2 of 2021
    Between:-
    PR. COMMISSIONER OF INCOME TAX, SHIMLA.





                                         ...APPELLANT

    (BY SH. VINAY KUTHIALA, SENIOR ADVOCATE
     WITH MS. VANDANA KUTHIALA, ADVOCATE.)

    AND

    M/S HYCRON ELECTRONICS, VILLAGE BATED,
    BAROTIWALA, TEHSIL BADDI,
    DISTRICT SOLAN, THROUGH ITS PROPRIETOR



                                                   .... RESPONDENT.
   (SH. CHANDRANARAYAN SINGH, ADVOCATE)




__________________________________________________________________
                  This appeal coming on for admission before notice





    this day, Hon'ble Mr. Justice Satyen Vaidya, delivered the





    following:

                  JUDGMENT

By way of instant appeal, the appellant seeks to assail

order dated 11.02.2020, passed by the Income Tax Appellate

Tribunal (for short 'ITAT'), Chandigarh in ITA No. 715/Chd./2019.

2. Respondent herein, (for short 'assessee'), declared

Rs.25,98,91,180/- as income in the ITR filed for the A.Y.

2015-2016. Assessment u/s 143(3) of the Income Tax Act (for

.

short 'Act') was completed on 30.10.2017 and income of the

assessee was assessed at Rs. 29,27,51,617/- by making following

additions:

i. Addition of Rs.13,79,767/- on account of disallowance of interest u/s 14A of the Income Tax

Act read with Rule 8D.

ii. Addition of Rs.3,12,44,216/- on account of loan from ex-partner as income under section 41(1) of the Act;

iii. Addition of Rs.2,36,456/- on account of expenditure

incurred on repair of building.

iv. Addition of Rs.6,71,504/- on account of loss on retiring asset sold.

3. Assessee assailed above noted order of A.O before CIT(A)

by way of appeal No. IT/198/17-18/SML and the same was

allowed in respect of amounts detailed at serial number ii to iv

above and further addition of Rs.8,68,744/- was deleted from

additional amount mentioned at serial number i above.

4. The revenue challenged the order dated 15.02.2019 of

the CIT(A) before the ITAT, Chandigarh. The appeal of the revenue

was dismissed vide impugned order assailed in the instant appeal.

5. The grievance of the appellant herein is that the ITAT

Chandigarh had wrongly proceeded to dismiss the appeal. The

revenue has thus, sought adjudication from this court on alleged

.

substantial question of law as reflected in para 7 of instant appeal.

6. Noticeably, the revenue seeks to assail the impugned

order only on the issue of deletion of the addition of Rs. 8,68,744/-

made u/s 14A of the Act on the ground that the same was against

CBDT's Circular No. 05/2014.

7. In view of the extent of challenge brought before this

court the involved tax effect is only to the tune of Rs. 2,68,441/-.

It is submitted on behalf of appellant that though the tax effect is

less than the prescribed limit for filing appeal before this court,

but the case of revenue was saved by para 10(b) of CBDT's Circular

No.17/2019 as the effect of impugned order was implied

declaration of CBDT's Circular No.05/2014 as illegal and ultra

vires.

8. We have heard learned counsel for the parties and have

also gone through the records of the case.

9. The controversy can be summed up in narrow

encompass. The issue for adjudication is whether the exemption

Clause 10 (b) of Circular No. 17/2019 dated 8.8.2019 issued by

the CBDT is applicable to facts of the case.

10. Perusal of impugned order passed by the ITAT reveals

.

that it has not declared CBDT's Circular No. 05/2014 either as

illegal or ultra vires. The findings recorded by the ITAT are only on

interpretation of the contents of said circular and as such we do

not find any merit in the contention raised by the appellant.

11. Circular No.17/2019 dated 8.8.2019 issued by the

CBDT, reads as under:

"Circular No. 17 of 2019

Date - 8th August, 2019

Further Enhancement of Monetary limits for filing of appeals by the Department before Income Tax Appellate Tribunal, High Courts and SLPs/appeals before Supreme Court - Amendment to Circular 3 of 2018 - Measures for reducing litigation.

Circular No. 3/2018 dated 11th July 2018 has been replaced by circular No. 17/2019 dated 8th August 2019 to enhance Monetary limits for filing of appeals by the Department before Income Tax

Appellate Tribunal, High Courts and SLPs/appeals before Supreme Court for reducing litigation.

               Appeals/SLPs     in Monetary Limit (Rs.)        Monetary Limit (Rs.)
               Income-tax matters (Previous Limit)             (Revised Limit)
                Before Appellate 20,00,000                     50,00,000





                Tribunal
                Before High Court 50,00,000                   1,00,00,000
                Before    Supreme 1,00,00,000                 2,00,00,000
                Court

                   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. No

appeal shall be filed in respect of an assessment year or years in which the tax effect is less than the monetary limit.

 Further, even in the case of 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, no

.

appeal shall be filed in respect of an assessment year or years in which the tax effect is less than the monetary limit.

 In case where a composite order/judgment involves more than one assessee, each assessee shall be dealt with separately."

12. It is not in dispute that the above noted Circular

No. 17/2019 is extension of Circular No. 3/2018 issued by the

CBDT whereby certain modifications have been made in the

original circular especially in respect of enhancement of revision of

monetary limits for appeals/SLPs in income tax matters. Thus, the

prescribed monetary limit for filing appeal before this court is

1,00,00,000/-, whereas the tax effect in instant case is much less

than the prescribed limit. The instant appeal, therefore, is clearly

not maintainable and the same is accordingly dismissed, so also

the pending application(s), if any.

                                                 (Tarlok Singh Chauhan)





                                                            Judge


15th December, 2021                                  (Satyen Vaidya)
             (GR)                                          Judge