High Court at Calcutta · Judgments and reasoned final orders
Principal Commissioner of Income Tax, Central-2, Kolkata v. Alert Consultants and Credit Private Limited
ITAT/191/2025 (IA No: GA/1/2025) ·
Dismissal of Revenue appeal below the Rs. 2 crore monetary threshold under CBDT Circular No. 5/2024 and Circular No. 9/2024; disallowance of weighted deduction on donation under Section 35(1)(ii) does not fall within the 'accommodation entry' exception in Clause 3.1(h).
1. FACTS OF THE CASE
The Revenue filed an appeal under Section 260A challenging the ITAT order dated 19.12.2024 deleting a disallowance of weighted deduction claimed under Section 35(1)(ii) on donations made to a scientific research institution. The tax effect involved was Rs. 89,53,365/-, below the Rs. 2 crore monetary limit prescribed for High Court appeals under CBDT Circular No. 9/2024 dated 17.09.2024.
2. DISCUSSION BY THE COURT
The Revenue contended that the appeal was maintainable under the exception in Clause 3.1(h) of CBDT Circular No. 5/2024 dated 15.03.2024 relating to bogus LTCG/STCG or accommodation entries. Examining Clause 3.1(h), the Division Bench held that the exception must be strictly construed and applies to organized tax-evasion schemes through bogus capital gains or penny stocks, and cannot be stretched by implication to cover every disallowance of a scientific research donation under Section 35(1)(ii) where the tax effect is only Rs. 89,53,365/-.
3. JUDICIAL DECISION
Dismissing the appeal as barred by the monetary threshold under CBDT Circular No. 5/2024 read with Circular No. 9/2024, the High Court left the substantial questions of law open.
4. OUTCOME
Assessee - Revenue appeal dismissed on low tax effect; Clause 3.1(h) exception held inapplicable.
5. AKHB REVIEW POINT
Exception clauses in CBDT litigation circulars (such as Clause 3.1(h) of Circular No. 5/2024) are construed strictly; unless the dispute squarely falls within the enumerated categories, appeals with tax effect below Rs. 2 crore must be dismissed.
Source and verification
6-page official High Court at Calcutta judgment PDF (20260119_WBCHCO0036832025.pdf, 65,424 bytes).
Original PDF: 6 pages · SHA-256: 40af312ecfd6fbdeab7aed3761485df7247dc65d6f67a1e3657cfd5354427521
Supplied source-reviewed note retained; original bytes and identity validation checked in this release. Substantive re-review is not claimed for this record.
Applies Sections 35(1)(ii), 260A, and 268A of the Income-tax Act, 1961 read with CBDT Circular Nos. 5/2024 and 9/2024. Income-tax Act, 2025 equivalence is not verified.
Full 6-page primary judgment PDF text read and verified page-by-page. Strictly construes Clause 3.1(h) exception of CBDT Circular No. 5/2024 dated 15.03.2024 read with Circular No. 9/2024 dated 17.09.2024.
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AI-assisted source review. Independent human approval is not represented.
General research only. Read the complete judgment and verify applicable law and subsequent treatment before reliance.