Facts of the Case

The Revenue (Principal Commissioner of Income Tax, Central-3) filed multiple appeals before the Delhi High Court against the assessee, Surya Buildwell Pvt. Ltd., arising out of a consolidated order passed by the lower authority.

During the hearing, it was acknowledged that the tax effect involved in each of the appeals was below ₹50,00,000.

Additionally, there was a delay in filing and re-filing of appeals, which was condoned by the Court as the assessee raised no objection.

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 High Court should adjudicate the substantive legal issue despite low tax effect.

Petitioner’s Arguments (Revenue)

  • The appeals arise from a common consolidated order, indicating that important legal questions are involved.
  • However, the Revenue fairly submitted that each appeal individually falls below the monetary threshold of ₹50 lakh, as prescribed by CBDT Circular No. 3/2018.
  • Therefore, the appeals may be disposed of without adjudicating the issue on merits.

Respondent’s Arguments (Assessee)

  • The assessee did not oppose the condonation of delay.
  • Implicitly supported disposal of appeals in terms of the CBDT Circular due to low tax effect.

Court’s Findings / Order

  • The Delhi High Court accepted the submission of the Revenue that the tax effect in each appeal was below ₹50,00,000.
  • The Court applied CBDT Circular No. 3/2018, which restricts filing/continuation of appeals below specified monetary limits.
  • Accordingly, the Court:
    • Disposed of all appeals without examining the merits of the case
    • Clarified that the legal issues/questions are left open and not decided

Important Clarification by the Court

  • The dismissal of appeals is not a decision on merits.
  • The questions of law remain open, meaning they can be raised in appropriate cases with higher tax effect in the future.

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 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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