Revenue appeal disposed due to tax effect below Rs.2 crores threshold under CBDT Circular September 2024

The Bombay HC disposed of a revenue appeal due to low tax effect below prescribed monetary limits. The court held that CBDT Circular dated 17th September 2024 establishing Rs.2 crores threshold applies to pending appeals, requiring revenue to withdraw appeals below this limit. The court rejected revenue's attempt to rely on exceptions from the 17th March 2024 Circular, ruling that such exceptions apply only prospectively from their introduction date, not to appeals filed before the relevant circular. Since the appeal was filed on 13th January 2023, prior to the March 2024 exception circular, revenue could not invoke those exceptions. The appeal was disposed of as tax effect was admittedly below the September 2024 monetary limits, with no order as to costs.

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ISSUES:

• Whether an appeal filed below the prescribed monetary limits set by CBDT Circulars can be entertained by the High Court.
• Whether exceptions to the monetary limits prescribed by CBDT Circulars apply retrospectively to appeals filed before the date of such Circulars.
• Whether the revised monetary limits in subsequent CBDT Circulars apply to pending appeals filed prior to the issuance of those Circulars.

RULINGS / HOLDINGS:

• The Court held that the monetary limits prescribed in the CBDT Circulars apply to pending appeals, and the revised monetary limits set out in the Circular dated 17th September 2024, increasing the limit to ? 2 Crores, are applicable to the present appeal.
• The exceptions carved out by the CBDT Circulars apply only prospectively, "i.e. from the date of the introduction of such exception," and do not apply to appeals filed prior to the relevant Circular.
• Since the appeal was filed on 13th January 2023, before the Circular dated 15th March 2024, the Revenue cannot rely on the exception under Clause 3.1(h) of that Circular to maintain the appeal.
• The appeal is accordingly disposed of as the tax effect is below the monetary limit of ? 2 Crores prescribed by the latest Circular, with no order as to costs.

RATIONALE:

• The Court applied the legal framework established by CBDT Circulars dated 15th March 2024 and 17th September 2024, which prescribe monetary limits for filing and prosecuting appeals before the High Court.
• Precedent decisions of this Court confirm that monetary limits apply to pending appeals and that exceptions in Circulars are prospective only, not retrospective.
• This interpretation ensures consistency and predictability in appellate jurisdiction, preventing the Revenue from relying on exceptions introduced after the filing of an appeal.
• The Court expressly reserved the right to consider the substantive questions of law raised by the Revenue in an appropriate case, thereby limiting the present decision strictly to the issue of maintainability based on monetary limits and exceptions.

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