Facts of the Case

The Revenue filed multiple appeals before the Delhi High Court against the respondent assessee. During the hearing, counsel for the Revenue submitted that the tax effect involved in each appeal was below ₹50 lakhs, which falls under the monetary limit prescribed by CBDT Circular No. 3/2018.

Based on this submission, the Revenue sought disposal of the appeals without adjudication of the substantial questions of law, with liberty to keep such questions open for future consideration.

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 substantial questions of law should still be adjudicated despite low tax effect.

Petitioner’s (Revenue’s) Arguments

  • The Revenue acknowledged that the tax effect in each appeal was below ₹50 lakhs.
  • Invoked CBDT Circular No. 3/2018, which restricts filing/continuation of appeals below specified monetary thresholds.
  • Requested that appeals be disposed of without deciding the legal issues, while keeping the questions of law open.

Respondent’s Arguments

  • None appeared on behalf of the respondent (as recorded: Through Nemo).

Court’s Order / Findings

  • The Court recorded the statement made by the Revenue regarding the low tax effect.
  • In view of CBDT Circular No. 3/2018, the Court disposed of the appeals without examining the merits or deciding the questions of law.
  • The Court expressly clarified that the issues raised remain open for consideration in appropriate cases where the monetary threshold is satisfied.

Important Clarification by the Court

  • Dismissal of appeal is not on merits.
  • Questions of law are kept open, meaning:
    • The same legal issue can be raised in future cases.
    • No precedent is set on the substantive legal issue.

Sections Involved

  • CBDT Circular No. 3/2018 dated 11 July 2018 (Monetary Limits for Filing Appeals)
  • Income Tax Act, 1961 (General Appellate Provisions under Section 260A)

Link to download the order -https://delhihighcourt.nic.in/app/case_number_pdf/2018:DHC:8333-DB/SKN29082018ITA9442018_102437.pdf

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