Facts of the Case

The Revenue instituted multiple Income Tax Appeals against the respondent assessee before the Delhi High Court challenging findings passed by the lower appellate authority. At the hearing stage, counsel for the Revenue informed the Court that the tax effect involved in the appeals was below ₹50 lakhs, thereby attracting the monetary threshold prescribed under CBDT Circular No. 3/2018. In light of the said circular, the Revenue sought disposal of the appeals without pressing the legal issues raised therein.

Issues Involved

  1. Whether the Revenue’s appeals are maintainable when the tax effect is below the monetary limit prescribed by CBDT Circular No. 3/2018?
  2. Whether the questions of law raised in the appeals should be decided despite low tax effect?
  3. Whether the Revenue retains the right to seek restoration if the case falls within the exceptions under the CBDT Circular?

Petitioner’s Arguments (Revenue)

  • The Revenue submitted that the tax effect involved in the present appeals was below ₹50 lakhs.
  • In view of CBDT Circular No. 3/2018, the departmental appeals were not required to be pursued.
  • It was requested that the appeals be disposed of without adjudication on merits.
  • The Revenue sought liberty to revive the appeals in the event it is subsequently found that the case falls under any exception to the Circular.

Respondent’s Arguments (Assessee)

The order does not record any detailed submissions advanced on behalf of the respondent assessee. However, the respondent was represented through counsel and the matter proceeded on the Revenue’s request for disposal in view of the low tax effect.

Court Findings / Court Order

The Delhi High Court recorded the statement made by the Revenue regarding the tax effect being below ₹50 lakhs and accepted the request for disposal of the appeals. The Court disposed of the appeals without examining or answering the legal issues raised, expressly leaving the questions of law open for consideration in an appropriate case.

The Court further granted liberty to the Revenue to file an application for revival if it is found that the matter falls under any exception to the CBDT Circular.

Important Clarification

  • The Court did not adjudicate upon the merits of the controversy.
  • The questions of law remain open.
  • Dismissal/disposal was purely on account of the monetary threshold under CBDT Circular No. 3/2018.
  • Revenue retains the right to revive the appeal where exceptions apply.

Sections Involved

  • Section 260A of the Income Tax Act, 1961 – Appeal before High Court
  • CBDT Circular No. 3/2018 dated 11.07.2018 – Monetary limits for filing departmental appeals

Link to download the order - https://delhihighcourt.nic.in/app/case_number_pdf/2018:DHC:8308-DB/SKN16112018ITA532018_150214.pdf

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