(By Sh. Vinay Kuthiala vs M/S Surge Industries
2021 Latest Caselaw 4882 HP

                             REPORTABLE/NON-REPORTABLE
    IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA
                  ON THE 4th DAY OF OCTOBER, 2021
                              BEFORE
          HON'BLE MR. JUSTICE TARLOK SINGH CHAUHAN




                                                           .

                           &
            HON'BLE MR. JUSTICE SATYEN VAIDYA.

                     ITA NO. 16 of 2021





    Between:-
    PR. COMMISSIONER OF INCOME TAX-1,
    AAYKAR BHAWAN, SECTOR 17-E,
    CHANDIGARH.


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

    M/S SURGE INDUSTRIES, 777/619/428,
    VILLAGE OGLI, KALA AMB,
    DISTRICT SIRMOUR, H.P.,



    THROUGH ITS PARTNER
    SH. DEEP NARAYAN GOYAL,
    S/O LATE SH. MADAN LAL GOYAL.      ....RESPONDENT.




__________________________________________________________________





                  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 28.05.2020, passed by the Income Tax Appellate

Tribunal, Chandigarh (for short 'ITAT'), in ITA No.

1223/Chd/2019.

2. Respondent herein, (for short 'assessee'), vide its return

.

of income for the A.Y. 2011-2012 declared Nil income, after

claiming deduction of Rs. 1,63,78,400/- under Section 80IC of the

Income Tax Act, 1961 (for short 'the Act'). The case of assessee

was selected for scrutiny and accordingly, vide order dated

27.12.2013 assessment under Section 143 (3) of the Act was

completed.

Subsequently, assessment was also framed under

Section 143 (3) read with Section 147 of the Act vide order dated

30.12.2018 and income of the assessee was assessed at

Rs.1,49,595/- by disallowing deduction under Section 80IC to the

extent of income of Rs. 1,45,595/-.

3. The assessee assailed the above noted assessment order

before CIT(A) Shimla by way of appeal No. IT/413/18-19/Sml. The

appeal of assessee was allowed vide order dated 25.06.2019.

4. The Department assailed the order of CIT(A), Shimla,

before the ITAT, Chandigarh in appeal No. 1223/Chd/2019. The

appeal of the Department has been dismissed by the ITAT,

Chandigarh vide impugned order.

5. The appellant has assailed the impugned order dated

28.05.2020 passed by the ITAT, Chandigarh on the ground that

the appeal was dismissed by the ITAT, Chandigarh only on the

.

ground that the tax effect was much less than the limit prescribed

by the Board in Circular No. 17/2019 dated 08.08.2019, issued by

the CBDT. The appellant has further raised the grievance that the

ITAT, Chandigarh had failed to consider the merits of the case.

According to appellant, the above noted circular was not applicable

6.

r to in view of Clause 10 (c) of the CBDT Circular No. 3/2018 dated

11.07.2018.

We have heard learned counsel for the parties and have

also gone through the records of the case.

7. The controversy can be summed up in narrow

encompass. The issue for adjudication is whether the appellant

can press into service the exemption Clause 10 (c) of Circular No.

3/2018 dated 11.7.2018 issued by the CBDT.

8. Perusal of impugned order passed by the ITAT reveals

that it has taken into consideration the Circular No.17/2019 dated

8.8.2019 issued by the CBDT, which 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."

9. 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.

10. It is evident from the impugned order that the

Department was duly represented at the time of hearing of appeal

before the ITAT, Chandigarh. No such ground had been raised on

.

behalf of the Department before the ITAT, Chandigarh requiring

the said Tribunal to decide the matter on merits in view of Clause

10 (c) of the Circular No. 3/2018.

11. Once the Department had not raised the plea of

applicability of Clause 10 (c) of CBDT Circular No. 3/2018, it

cannot be allowed to raise such plea in the present appeal.

12. The ITAT has correctly held the appeal before it to be not

maintainable in view of clear mandate of Circular No. 17/2019.

Same principle applies to the filing of present appeal. Hence, no

substantial question of law arises for determination by this Court.

13. No other infirmity has been pointed out in the impugned

order.

14. In the light of above discussion, we find no merit in the

appeal and the same is dismissed, so also the pending

application(s), if any.

                                            (Tarlok Singh Chauhan)
                                                         Judge


4th October, 2021                                    (Satyen Vaidya)
             (GR)                                            Judge