Facts of the Case

The present matter comprises three connected appeals filed by the Revenue (Principal Commissioner of Income Tax) against different assessees, namely Umbrella Projects Pvt. Ltd., Evergreen International Ltd., and Jasisa Tyres Pvt. Ltd.

During the course of hearing, the learned counsel for the appellant (Revenue) submitted that the tax effect involved in these appeals was below Rs. 50,00,000/-.

It was further stated that in view of CBDT Circular No. 3/2018 dated 11.07.2018, such appeals are not required to be pursued, and the substantial question of law may be left open 

Issues Involved

  1. Whether appeals filed by the Revenue are maintainable where the tax effect is below Rs. 50 lakhs as per CBDT Circular No. 3/2018.
  2. Whether the High Court is required to adjudicate substantial questions of law in such cases.

Petitioner’s Arguments (Revenue)

  • The learned counsel for the appellant submitted that the tax effect in the present appeals is below the prescribed monetary limit of Rs. 50,00,000/-.
  • It was contended that in view of CBDT Circular No. 3/2018, the appeals should not be pressed.
  • The appellant requested that the questions of law be left open 

Respondent’s Arguments

  • No detailed arguments from the respondents are recorded in the order.
  • The matter was primarily disposed of based on the statement made by the appellant (Revenue).

Court Order / Findings

  • The Hon’ble Delhi High Court recorded the statement made by the appellant regarding the low tax effect.
  • The Court held that in view of CBDT Circular No. 3/2018, the appeals are not required to be entertained.
  • Accordingly, all the appeals were disposed of.
  • The Court expressly clarified that the question of law has not been answered.

Important Clarification by Court

  • The Court categorically stated that:
    • The questions of law are left open.
    • The disposal is solely on account of low tax effect (below Rs. 50,00,000/-).
    • The order should not be treated as a precedent on merits of the issues involved.

Link to download the order -https://delhihighcourt.nic.in/app/case_number_pdf/2018:DHC:8323-DB/SKN27072018ITA7762018_155216.pd 

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