Facts of the Case

The present matter pertains to two appeals filed by the Revenue before the Delhi High Court under Section 260A of the Income Tax Act, 1961. The appeals arose from orders passed in favor of M/s Seasons Textiles Ltd.

At the time of hearing, it was observed that the tax effect involved in both appeals was below ₹50,00,000, which is the monetary threshold prescribed under CBDT Circular No. 3/2018.

Issues Involved

  1. Whether the High Court should adjudicate substantial questions of law when the tax effect is below the monetary limit prescribed by CBDT Circular No. 3/2018.
  2. Whether such appeals filed by the Revenue are maintainable in view of the low tax effect.

Petitioner’s Arguments (Revenue)

  • The Revenue filed appeals challenging the orders passed in favor of the assessee.
  • It sought adjudication of substantial questions of law arising from the case.

Respondent’s Arguments (Assessee)

  • Though not elaborately recorded, the implication is that the assessee relied upon the applicability of the CBDT Circular prescribing monetary limits, thereby questioning the maintainability of the appeals.

Court Findings / Order

The Delhi High Court held that:

  • Since the tax effect in both appeals was below ₹50,00,000, the threshold specified under CBDT Circular No. 3/2018, the Court declined to examine the substantial questions of law.
  • The appeals were disposed of without answering the substantial questions of law, leaving them open.

Important Clarification by the Court

  • The Court granted liberty to the Revenue to seek revival of the appeals if the case falls under any of the exceptions provided in the CBDT Circular.

Sections Involved

  • Section 260A of the 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:8294-DB/SKN13092018ITA2372009_133238.pdf

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