Facts of the Case

The Revenue filed multiple appeals before the Delhi High Court against Sahara India Limited. During the hearing, the counsel for the Revenue submitted that the tax effect involved in the appeals was below ₹50,00,000, which falls below the monetary threshold prescribed under CBDT Circular No. 3/2018.

Accordingly, the Revenue sought disposal of the appeals without pressing the substantive questions of law.

Issues Involved

  1. Whether the appeals filed by the Revenue are maintainable when the tax effect is below the prescribed monetary limit?
  2. Whether dismissal of such appeals would amount to adjudication on merits?

Petitioner’s Arguments (Revenue)

  • The Revenue acknowledged that the tax effect is below ₹50 lakhs.
  • In view of CBDT Circular No. 3/2018, the appeals may be disposed of without examining the legal issues involved.

Respondent’s Arguments (Assessee)

  • Though not elaborately recorded, the respondent would benefit from the application of the CBDT circular limiting litigation.
  • No opposition appears to have been raised regarding dismissal based on low tax effect.

Court’s Findings / Order

  • The Delhi High Court recorded the statement of the Revenue regarding low tax effect.
  • The Court disposed of all appeals in terms of CBDT Circular No. 3/2018.
  • It was expressly observed that:
    • The Court has not examined the merits of the case.
    • All legal issues/questions are left open.

Important Clarification by Court

  • Dismissal of appeal due to low tax effect does not create a binding precedent on merits.
  • The legal issues involved remain open for adjudication in appropriate cases.
  • Such dismissal is purely administrative and policy-driven, not judicial determination.

Sections  Involved

  • CBDT Circular No. 3/2018 dated 11.07.2018
  • Monetary Limits for Filing Appeals (Income Tax Litigation Policy)
  • Provisions relating to Income Tax Appeals before High Court

Link to download the order -

https://delhihighcourt.nic.in/app/case_number_pdf/2018:DHC:8317-DB/SKN25092018ITA6402018_153152.pdf

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