Facts of the Case

The present matter pertains to appeals filed by the Principal Commissioner of Income Tax (Central)-2 against M/s M.L. Singhi & Associates (P) Ltd. before the Delhi High Court. The appeals were instituted under the Income Tax Act challenging certain findings; however, during the course of hearing, it was acknowledged that the tax effect involved in the appeals was below the prescribed monetary threshold 

Issues Involved

  • Whether the Income Tax Department’s appeals are maintainable when the tax effect is below the monetary limit prescribed under CBDT Circular No. 17/2019.

Petitioner’s Arguments (Revenue)

The Revenue preferred the appeals challenging the order of the lower authority. However, no substantial argument could override the applicability of the CBDT circular concerning the monetary threshold.

Respondent’s Arguments (Assessee)

No appearance was recorded on behalf of the respondent assessee at the time of hearing.

Court’s Findings / Order

  • The tax effect in the present appeals was lower than ₹1,00,000, which is below the threshold limit prescribed by CBDT Circular No. 17/2019.
  • In view of the said circular, the appeals filed by the Revenue were not maintainable.

Final Order

  • The appeals were dismissed on account of low tax effect.

Important Clarification

  • The dismissal of the appeal is not on merits, but strictly due to low tax effect as per CBDT policy.
  • Such dismissal does not lay down any legal precedent on substantive tax issues.
  • The CBDT circular is binding on the Revenue authorities, limiting unnecessary litigation 

Link to download the order -https://delhihighcourt.nic.in/app/case_number_pdf/2020:DHC:3910-DB/MMH24112020ITA6722019_162157.pdf

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