The Commissioner Of Income Tax Central Vs Ms Rungta Project Ltd. — Jharkhand HC (2026) — LawSathi Research

The Commissioner Of Income Tax Central Vs Ms Rungta Project Ltd. — Jharkhand HC (2026) — LawSathi Research

What the court decided

AI extract

Outcome

Appeal disposed of on the ground of low tax effect with the questions of law left open; pending Interlocutory Applications, if any, do not survive and stand disposed of.

Issue for consideration

Whether, where the tax effect is below the monetary limit, the Revenue can invoke the exception under para 10(c) of CBDT Circular No. 3 of 2018 dated 11.07.2018 (adverse judgments on issues where Revenue Audit Objections were accepted by the department), given that CBDT Circular No. 5 of 2024 dated 15.03.2024 supersedes earlier circulars without a similar exception, and whether the limits in Circular No. 5 of 2024 apply to pending appeals.

Court's answer

The Court considered the Revenue's submission invoking the para 10(c) exception of Circular No. 3 of 2018 but is unable to agree.

Ratio / Principle

CBDT's latest Circular No. 5 of 2024 dated 15.03.2024 supersedes the previous circulars, which would include Circular No. 3 of 2018 dated 11.07.2018.

Key takeaways

Neither Circular No. 5 of 2024 dated 15.03.2024 nor Circular No. 9 of 2024 dated 17.09.2024 carves out an exception similar to para 10(c) of Circular No. 3 of 2018.ratio¶4
The tax effect limits specified in Circular No. 5 of 2024 dated 15.03.2024 apply to pending appeals like the present one.ratio¶4
On the grounds of low tax effect, the Court disposes of the appeal leaving the questions of law open.ratio

Detailed headnote1 paragraphs

Jharkhand High Court at Ranchi, Division Bench (M.S. Sonak, C.J. and Rajesh Shankar, J.), disposed of Tax Appeal No. 27 of 2016 (The Commissioner of Income Tax (Central) v. M/S. Rungta Project Ltd.) on 25.02.2026 on the ground of low tax effect, leaving the questions of law open. The tax effect was admittedly below Rs. 2 crores. The Revenue contended that the case fell within the exception under para 10(c) of CBDT Circular No. 3 of 2018 dated 11.07.2018 (adverse judgments on issues where Revenue Audit Objections were accepted by the department being contestable regardless of tax effect). The Court held that the CBDT's latest Circular No. 5 of 2024 dated 15.03.2024 supersedes the previous circulars including Circular No. 3 of 2018; that neither Circular No. 5 of 2024 nor Circular No. 9 of 2024 dated 17.09.2024 carves out a similar exception; and that the tax effect limits in Circular No. 5 of 2024 apply to pending appeals. The Court noted that in similar circumstances the Bombay High Court in Principal Commissioner of Income Tax-15 v. Sulzer Pumps India Limited, 2025 SCC OnLine Bom. 2646 had rejected the Revenue's identical contention based on earlier CBDT circulars. Pending interlocutory applications, if any, were held not to survive and stood disposed of. Judgment marked N.A.F.R.

2026:JHHC:5607-DB

IN THE HIGH COURT OF JHARKHAND AT RANCHI

Tax Appeal No. 27 of 2016

The Commissioner of Income Tax (Central), Central Revenue Building, Bir Chand Patel Marg, P.O.- G.P.O., P.S. Kotwali, District: Patna.

… …. Appellant

Versus

M/S. Rungta Project Ltd., 301, Mangalam Building, 24, Hemant Basu Sarani, Kolkata, P.O., P.S. & District: Kolkata.

…. …. Respondent

--------- CORAM: HON’BLE THE CHIEF JUSTICE HON’BLE MR. JUSTICE RAJESH SHANKAR

--------For the Appellant: Mr. Kumar Vaibhav, Advocate For the Respondent: Mrs. Darshana Poddar Mishra, Advocate Mr. Mahendra Kumar Choudhary, Advocate ---------

15 /Dated: 25.02.2026

Heard learned counsel for the parties.

In this case, the tax effect is admittedly below Rs. 2 crores. However, Mr. Kumar Vaibhav, learned counsel for the appellant-Revenue submits that the matter falls within the exception under para 10(c) of the CBDT Circular No. 3 of 2018 dated 11.07.2018 which provides that adverse judgments relating to issues where Revenue Audit Objection in the case has been accepted by the department should be contested on merits notwithstanding the tax effect entailed is less than the prescribed monetary limits or there is no tax effect.

We have considered Mr. Kumar Vaibhav’s submission but we are unable to agree.

The CBDT’s latest Circular No. 5 of 2024 dated 15.03.2024 supersedes the previous circulars which would include Circular No. 3 of 2018 dated 11.07.2018. In Circular No. 5 of 2024 dated 15.03.2024 and 9 of 2024 dated 17.09.2024, there is no similar exception carved out. The

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2026:JHHC:5607-DB

tax effect limits specified in Circular No. 5 of 2024 dated 15.03.2024 would apply to pending appeals like the present one.

Therefore, on the grounds of low tax effect, we dispose of this appeal by leaving the questions of law open.

In similar circumstances, the Division Bench of the High Court of Bombay, in the case of Principal Commissioner of Income Tax-15 Vs. Sulzer Pumps India Limited, 2025 SCC OnLine Bom. 2646 had rejected the revenue’s contention based upon earlier CBDT Circulars and disposed of the appeal in which the tax effect was below the enhanced tax limits prescribed under the later Circulars issued by the CBDT.

Pending Interlocutory Applications, if any, do not survive and are disposed of.

(M.S. Sonak, C.J.)

(Rajesh Shankar, J.)

February 25, 2026

N.A.F.R.

APK/VK

Uploaded on 26.02.2026

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