Facts of the Case

The Revenue (Principal Commissioner of Income Tax, Delhi-2) filed appeals before the Delhi High Court against the respondent, Ashwani Kapoor. During the hearing, the counsel for the Revenue submitted that the tax effect involved in the appeals was below ₹50,00,000, which is the monetary threshold prescribed under CBDT Circular No. 3/2018.

Based on this submission, the Revenue requested that the appeals be disposed of without adjudicating the substantive questions of law, leaving them open for consideration in appropriate cases.

Issues Involved

  1. Whether the appeals filed by the Revenue are maintainable when the tax effect is below the prescribed monetary limit under CBDT Circular No. 3/2018.
  2. Whether the Court should adjudicate the substantial questions of law despite low tax effect.

Petitioner’s (Revenue’s) Arguments

  • The Revenue acknowledged that the tax effect was below ₹50 lakhs, falling within the limits prescribed by CBDT Circular No. 3/2018.
  • It was requested that the appeals may be disposed of without adjudicating the issues on merits, keeping the questions of law open.

Respondent’s Arguments

  • The respondent was represented by counsel; however, no detailed arguments are recorded in the order, as the matter was disposed of based on the Revenue’s statement regarding low tax effect.

Court’s Findings / Order

  • The Delhi High Court accepted the statement of the Revenue regarding the low tax effect.
  • The appeals were disposed of without examining the issues/questions on merits.
  • The Court expressly held that the questions of law are left open for determination in appropriate cases.

Important Clarification

  • The Court clarified that the Revenue is at liberty to seek revival of the appeals if the case falls within any exception to the CBDT Circular.

Link to download the order -https://delhihighcourt.nic.in/app/case_number_pdf/2018:DHC:8315-DB/SKN16102018ITA5582018_152326.pdf

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