Facts of the Case

The Revenue filed multiple appeals (ITA Nos. 985/2018, 988/2018, 989/2018, 990/2018, 991/2018, and 992/2018) against the respondent assessee, Surya Buildwell Pvt. Ltd., arising out of a consolidated order.

During the proceedings, applications for condonation of delay in filing and refiling the appeals were moved. The assessee did not object to such condonation, and accordingly, the delay was condoned by the Court.

Subsequently, it was brought to the notice of the Court that the tax effect in each of the appeals was below ₹50,00,000, which falls below the monetary threshold prescribed under CBDT Circular No. 3/2018.

Issues Involved

  1. Whether the Revenue’s appeals 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 substantive questions of law despite the low tax effect.

Petitioner’s (Revenue) Arguments

  • The Revenue submitted that the appeals arise from a consolidated order.
  • However, it was fairly conceded that the tax effect in each individual appeal is below ₹50 lakh, and therefore, in light of CBDT Circular No. 3/2018, the appeals may be disposed of without adjudication of the issues raised.

Respondent’s (Assessee) Arguments

  • The assessee did not raise any objection to the condonation of delay in filing and refiling of appeals.
  • Implicitly, the assessee supported disposal of appeals in accordance with the CBDT Circular considering the low tax effect.

Court’s Findings / Order

  • The Court took note of the statement made by the Revenue regarding the low tax effect.
  • Relying on CBDT Circular No. 3/2018, the Court held that the appeals do not warrant adjudication on merits.
  • Accordingly, all appeals were disposed of without examining the questions of law raised.

Important Clarification by the Court

  • The Court expressly clarified that:
    • The questions/issues of law are left open.
    • The dismissal is solely on account of low tax effect and not on merits.

Sections Involved

  • Income Tax Act, 1961 (Appeals Provisions)
  • CBDT Circular No. 3/2018 dated 11.07.2018 (Monetary Limits for Filing Appeals)

Link to download the order -https://delhihighcourt.nic.in/app/case_number_pdf/2018:DHC:8335-DB/SKN10092018ITA9882018_103438.pdf 

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