FACTS OF THE CASE

The Revenue (Income Tax Department) filed multiple appeals before the Delhi High Court against different assessees, namely Ajnara India Ltd., Moonrock Hospitality Pvt. Ltd., and N.P. Goel Education Trust.

During the hearing, the counsel for the Revenue submitted that the tax effect involved in all the appeals was below ₹50,00,000, which is the monetary threshold prescribed under CBDT Circular No. 3/2018 for filing appeals before the High Court.

Accordingly, the Revenue sought disposal of the appeals without adjudication on merits, while requesting liberty to revive the appeals if covered under any exception.

ISSUES INVOLVED

  1. Whether appeals filed by the Revenue are maintainable when the tax effect is below the monetary limit prescribed under CBDT Circular No. 3/2018.
  2. Whether the Court should adjudicate substantial questions of law despite low tax effect.
  3. Whether liberty can be granted to the Revenue to revive appeals if exceptions apply.

PETITIONER’S ARGUMENTS (REVENUE)

  • The Revenue acknowledged that the tax effect in the present appeals is below ₹50 lakh, falling under the threshold prescribed in CBDT Circular No. 3/2018.
  • It was submitted that in view of the binding circular, the appeals may be disposed of without addressing the substantial questions of law.
  • The Revenue requested that:
    • The legal issues be kept open, and
    • Liberty be granted to revive the appeals if the cases fall within exceptions to the circular.

RESPONDENT’S ARGUMENTS

  • In some matters, no appearance was recorded on behalf of the respondents.
  • However, no substantial opposition was noted regarding disposal based on low tax effect.

COURT ORDER / FINDINGS

  • The Delhi High Court accepted the submission of the Revenue regarding low tax effect.
  • The Court held that:
    • Appeals are liable to be disposed of in terms of CBDT Circular No. 3/2018.
    • The Court did not examine or decide the substantial questions of law.
    • All issues were kept open.
    • Liberty was granted to the Revenue to seek revival of appeals if the cases fall under exceptions.
  • Pending applications were also disposed of.

IMPORTANT CLARIFICATION

  • The dismissal of the appeals was not on merits.
  • The questions of law remain open and can be adjudicated in appropriate cases.
  • The Revenue retains the right to revive appeals if:
    • The case falls under exceptions specified in CBDT Circular No. 3/2018, or
    • The monetary threshold condition does not apply.

SECTIONS  INVOLVED

  • Income Tax Act, 1961
    • Section 260A – Appeal to 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:8339-DB/SKN12102018ITA11252018_104753.pdf

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.