Facts of the Case

The present matter pertains to two appeals filed by the Revenue before the Delhi High Court against M/s Business India Television International Ltd. The appeals (ITA 798/2018 and ITA 799/2018) involved certain substantial questions of law arising under the Income Tax Act.

During the course of proceedings, counsel for the appellant (Revenue) submitted that the total tax effect involved in both appeals was less than ₹50 lakhs. Therefore, in view of CBDT Circular No. 3/2018 dated 11.07.2018, the appeals did not meet the monetary threshold for being pursued before the High Court.

Issues Involved

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

Petitioner’s (Revenue’s) Arguments

  • The Revenue initially preferred the appeals raising substantial questions of law.
  • However, during hearing, it was fairly conceded that:
    • The aggregate tax effect was below ₹50 lakhs.
    • As per CBDT Circular No. 3/2018, such appeals are not required to be pressed.

Respondent’s Arguments

  • Though not elaborately recorded in the order, the respondent stood to benefit from:
    • The applicability of the CBDT circular limiting litigation based on tax effect.
    • Non-adjudication of the substantial questions of law due to low tax impact 

Court Order / Findings

  • The Delhi High Court accepted the submission of the Revenue.
  • It held that:
    • In view of CBDT Circular No. 3/2018, the appeals need not be entertained due to low tax effect.
  • Accordingly:
    • The appeals were disposed of without answering the substantial question of law, which was left open.
    • The Court also stated that no notice would be issued in the application for condonation of delay in such circumstances 

Important Clarification

  • The Court expressly clarified that:
    • The substantial questions of law remain open and are not decided on merits.
    • The dismissal is purely based on monetary limits prescribed by CBDT and not on substantive legal adjudication 

Sections Involved

  • Income Tax Act, 1961 (general appellate provisions)
  • 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:8329-DB/SKN30072018ITA7992018_161713.pdf

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