Facts of the Case

The Revenue (Commissioner of Income Tax – LTU) filed appeals before the Delhi High Court against the respondent, SRF Limited. The matter pertained to tax disputes under the Income Tax Act.

At the outset, applications for condonation of delay in re-filing the appeals were filed and allowed by the Court.

During the hearing, counsel for the assessee submitted that the tax effect involved in both appeals was below the monetary threshold prescribed by CBDT Circular No. 3/2018 dated 11 July 2018.

Issues Involved

  1. Whether the appeals filed by the Revenue are maintainable when the tax effect is below the monetary limit prescribed by CBDT.
  2. Whether such appeals should be entertained or dismissed in light of binding CBDT instructions.

Petitioner’s (Revenue) Arguments

  • The Revenue pursued the appeals challenging the orders passed in favour of the assessee.
  • Applications for condonation of delay were filed, indicating intent to prosecute the matter on merits.

Respondent’s (Assessee) Arguments

  • The respondent contended that the tax effect in both appeals falls below the monetary limit specified by CBDT Circular No. 3/2018.
  • Therefore, the appeals are not maintainable and should not be pressed further.

Court’s Findings / Order

  • The Court accepted the submission of the assessee regarding the low tax effect.
  • It held that in view of the CBDT Circular, the appeals are not maintainable.
  • Accordingly, the appeals were treated as not pressed and disposed of.
  • The Court further clarified that:

If the Revenue later finds that the tax effect exceeds the prescribed limit, it is at liberty to file an appropriate application.

Important Clarification

  • Dismissal is not on merits, but solely due to low tax effect.
  • The Revenue retains the right to revive the matter if the factual position regarding tax effect changes.
  • CBDT Circulars are binding on the Revenue authorities and directly impact maintainability of appeals.

Sections Involved

  • Income Tax Act, 1961 (General appellate provisions)
  • CBDT Circular / Notification No. 3/2018 dated 11 July 2018 (Monetary Limits for Filing Appeals)

 Link to download the order -

https://delhihighcourt.nic.in/app/case_number_pdf/2019:DHC:7401-DB/SMD05082019ITA12362018_160027.pdf

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