THE INCOME TAX OFFICER V. SMT. SARLA GUPTA

MCC/625/2019

AI Insights

The case involves multiple Miscellaneous Civil Cases (MCC Nos. 622, 624, and 625 of 2019) filed by the Income Tax Officer against Smt. Sarla Gupta, proprietor of M/s Electronic Traders. The appeals were initially dismissed due to the tax liability being below the Rs. 50 Lacs threshold set by a CBDT circular. The Revenue argued that the cases should be heard on merits as they fell under an exception in the circular related to audit objections. However, the court clarified that the exception applied only to cases with a Revenue Audit Objection, not merely responses to queries from the audit department. Consequently, the court dismissed the MCCs, affirming the original decision.

• Counselvise Citation: [2019] 140 COUNSELVISE.COM (IT) 684455 (HC-CHHATTISGARH)
• Appeal Type: Others
• Pronouncement Date: 16-09-2019
• Assessment Year: misc
• Other Referred Cases: Bharti Cellular Ltd. Vs. ACIT Circle 57, Kolkata (2011) 12 Taxman 30 (Cal)
• Laws Referred To: CBDT Circular dated 11.07.2018, Section 195H of the Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Assessee Lawyers: AMIT CHAUDHARI; NAUSHINA ALI
• Keywords: Audit objection; CAG observation; Monetary limit; Revenue Audit Objection
• Section: 195H

Judgement Text

"1 MCC No. 622 of 2019 NAFR HIGH COURT OF CHHATTISGARH, BILASPUR MCC No. 622 of 2019 The Income Tax Officer Aaykar Bhawan, Behind Jhankar Talkies, Civil Lines, Jagdalpur, District- Bastar, Chhattisgarh. ---- Applicant Versus Smt. Sarla Gupta W/o Mukesh Gupta Prop. M./s Electronic Traders Vadhera Complex, Jagdalpur, District- Bastar, Chhattisgarh. ---- Respondent MCC No. 624 of 2019 The Income Tax Officer Aaykar Bhawan, Behind Jhankar Talkies, Civil Lines, Jagdalpur, District Bastar Chhattisgarh. ---- Applicant Versus Smt. Sarla Gupta W/o Mukesh Gupta, Prop. M/s Electronic Traders Vadhera Complex, Jagdalpur, District Bastar Chhattisgarh. ---- Respondent MCC No. 625 of 2019 The Income Tax Officer Aaykar Bhawan, Behind Jhankar Talkies, Civil Lines, Jagdalpur, District- Bastar, Chhattisgarh. ---- Applicant 2 MCC No. 622 of 2019 Versus Smt. Sarla Gupta W/o Mukesh Gupta Prop. M/s Electronic Traders Vadhera Complex, Jagdalpur, District- Bastar, Chhattisgarh. ---- Respondent For Applicant :- Shri Amit Chaudhari, Advocate and Ms. Naushina Afrin Ali, Advocate. Hon'ble Shri Prashant Kumar Mishra Hon'ble Shri Parth Prateem Sahu, JJ. Order On Board By Prashant Kumar Mishra, J. 16/09/2019 1. This order shall govern disposal of MCC Nos. 622 of 2019, 624 of 2019 and 625 of 2019. The relevant tax cases were dismissed for the reason that they were hit by the monetary limit of Rs.50 Lacs fixed by the CBDT in its circular dated 11.07.2018. The tax liability for the relevant assessment year was less than Rs.50 Lacs, therefore, the appeals were dismissed as not maintainable. 2. In these MCCs, it is argued by learned counsel for the Revenue that the tax cases were maintainable on merits for the reason that they were in the category of exception as 3 MCC No. 622 of 2019 mentioned in clause 10(c) of the CBDT circular dated 11.07.2018. He would submit that there was an audit objection in respect of the assessee's return, therefore, under clause 10 (c), the tax cases should be heard on merits. 3. We have seen the order passed by the AO for each of the assessment year. The AO would refer to reference made by the department to the Comptroller and Auditor General seeking correct interpretation of the provisions. The CAG, in its turn, observed that “ the reply submitted is not accepted”. Reliance placed on the judgment of Kolkata High Court decision in the case of Bharti Cellular Ltd. Vs. ACIT Circle 57, Kolkata (2011) 12 Taxman 30 (Cal) wherein it was decided “that there was principal agent relationship and the discount was, in real sense, commission paid to resellers and same would attract to the provisions of section 195H”. 4. Bare perusal of the above observation of the CAG would make it manifest that the same was a reply to the query raised by the revenue and there was no audit objection by the CAG of its own referring to any mistake in the order of the AO. Clause 10(c) refers to the word Revenue Audit Objection , it does not refer to any observation by the CAG on reference made by the department. There is difference between Audit objection and an answer to the query raised 4 MCC No. 622 of 2019 by department. Thus, the argument raised by learned counsel for the revenue that the appeal preferred by the department would be within the exception clause 10(c), is not acceptable. 5. Our earlier order dismissing the appeal being hit by the monetary limit does not call for reconsideration. 6. Accordingly, the MCCs deserve to be and are hereby dismissed. SD/- SD/- (Prashant Kumar Mishra) (Parth Prateem Sahu) Judge Judge Ayushi "