Facts of the Case

The Revenue filed multiple appeals (ITA Nos. 985, 988, 989, 990, 991, 992 of 2018) against Surya Buildwell Pvt. Ltd. arising from a common consolidated order.

At the outset, delay in filing and re-filing the appeals was condoned upon consent of the assessee.

Subsequently, during the hearing, the Revenue itself submitted that the tax effect in each appeal was below ₹50,00,000, which falls below the threshold prescribed under CBDT Circular No. 3/2018.

Issues Involved

  1. Whether 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 on the substantive legal issue despite low tax effect.

Petitioner’s (Revenue) Arguments

  • The appeals arose from a common consolidated order, implying importance of the legal issue.
  • However, the Revenue fairly submitted that tax effect in each case was below ₹50 lakhs, attracting the CBDT Circular limiting appeals.
  • Requested disposal of appeals in terms of the circular without adjudication of the legal issue.

Respondent’s (Assessee) Arguments

  • The assessee did not object to the condonation of delay.
  • Implicitly supported disposal in light of the CBDT circular, as the monetary threshold was not met.

Court’s Findings / Order

  • The Court accepted the submission of the Revenue regarding low tax effect.
  • Held that in view of CBDT Circular No. 3/2018, the appeals are liable to be disposed of without examining the merits.
  • Accordingly, all appeals were disposed of without adjudicating the questions of law.

Important Clarification by the Court

  • The Court expressly clarified that:
    • The legal issue/question is left open.
    • The dismissal is not on merits, but solely due to low tax effect.

Sections  Involved

  • Income Tax Act, 1961
  • 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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