Facts of the Case

  • The Revenue preferred appeals before the Delhi High Court against the respective respondents.
  • The matters involved determination of substantial questions of law under the Income Tax Act.
  • During proceedings, counsel for the Revenue acknowledged that the tax effect in both appeals was below ₹50 lakhs.

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 are maintainable in light of the binding CBDT circular.

Petitioner’s Arguments (Revenue)

  • The Revenue submitted that the tax effect in the present appeals was below ₹50,00,000.
  • In view of CBDT Circular No. 3/2018 dated 11.07.2018, the appeals were not required to be pursued.
  • It was requested that the matters be disposed of without answering the substantial questions of law.

Respondent’s Arguments

  • The order does not specifically record detailed arguments from the respondents.
  • The matter was disposed primarily based on the submission of the Revenue regarding low tax effect.

Court’s Findings / Order

  • The Court recorded the statement made by the Revenue regarding the low tax effect.
  • It held that in view of CBDT Circular No. 3/2018, the appeals need not be examined on merits.
  • Accordingly, the appeals were disposed of without answering the substantial questions of law, leaving them open for consideration in appropriate cases.

Important Clarification by the Court

  • The Court expressly clarified that:
    • The substantial questions of law are left open.
    • The dismissal is not on merits, but purely on account of low tax effect.
  • This ensures that the same legal issues can be raised in future cases where the tax effect exceeds the prescribed threshold.

Link to download the order -https://delhihighcourt.nic.in/app/case_number_pdf/2018:DHC:8310-DB/SKN31072018ITA3282018_150823.pdf

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.