Facts of the Case

The Revenue filed appeals before the Delhi High Court against the respective respondents. During the hearing, counsel for the Revenue submitted that the tax effect involved in both appeals was less than ₹50 lakhs, which falls below the prescribed monetary threshold for filing appeals as per CBDT Circular No. 3/2018 dated 11 July 2018.

Issues Involved

  • 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.
  • Whether the Court should adjudicate the substantive questions of law despite low tax effect.

Petitioner’s Arguments (Revenue)

  • The Revenue acknowledged that the tax effect in each appeal is below ₹50 lakhs.
  • It was submitted that in view of the CBDT Circular, the appeals may be disposed of without adjudication, and the issues/questions of law may be kept open for future consideration.

Respondent’s Arguments

  • The respondents supported the disposal of appeals in light of the binding CBDT Circular and the low tax effect involved.

Court’s Findings / Order

  • The Delhi High Court recorded the statement of the Revenue.
  • The Court held that since the tax effect is below the prescribed threshold, the appeals are disposed of without adjudicating the issues/questions raised.
  • The Court clarified that the questions of law are left open.
  • Additionally, the Court did not decide the application for condonation of delay filed in one of the appeals.

Important Clarification

  • The dismissal of appeals is not on merits.
  • The questions of law remain open and may be adjudicated in appropriate cases where the tax effect exceeds the prescribed limit.
  • The judgment reinforces the binding nature of CBDT Circulars on Revenue authorities.

Sections / Provisions

  • Income Tax Act, 1961 – Appeals provisions
  • CBDT Circular No. 3/2018 dated 11 July 2018 (Monetary limits for filing appeals)

Link to download the order -

https://delhihighcourt.nic.in/app/case_number_pdf/2018:DHC:8309-DB/SKN05092018ITA2662018_150517.pdf

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