Facts of the Case

The present matter consists of three connected income tax appeals filed by the Principal Commissioner of Income Tax against different assessees, namely:

  • Umbrella Projects Pvt. Ltd.
  • Evergreen International Ltd.
  • Jasisa Tyres Pvt. Ltd.

The appeals were preferred before the Delhi High Court under Section 260A of the Income Tax Act, 1961, raising certain questions of law arising from orders of lower authorities.

However, during the hearing, it was submitted by the counsel for the Revenue that the tax effect involved in each of the appeals was below ₹50,00,000.

Issues Involved

  1. Whether the High Court should adjudicate questions of law in appeals where the tax effect is below the monetary threshold prescribed by CBDT?
  2. Whether such appeals are maintainable in view of CBDT Circular No. 3/2018 dated 11.07.2018?

Petitioner’s Arguments (Revenue)

  • The Revenue initially filed appeals raising substantial questions of law.
  • However, during proceedings, it was fairly conceded that:
    • The tax effect in each appeal was below ₹50 lakhs.
    • As per CBDT Circular No. 3/2018, such appeals are not required to be pursued.

Respondent’s Arguments (Assessee)

  • Though not elaborately recorded in the order, the respondents implicitly supported dismissal based on:
    • Applicability of CBDT low tax effect circular, and
    • Non-maintainability of appeal below prescribed monetary limits.

Court’s Findings / Order

  • The Court recorded the submission of the Revenue regarding low tax effect.
  • It held that:
    • In terms of CBDT Circular No. 3/2018, the question of law need not be examined.
    • The appeals were accordingly disposed of without adjudicating the merits.

Important Clarification by the Court

  • The Court expressly clarified that:
    • No question of law has been decided.
    • The dismissal is solely on account of low tax effect.
    • Therefore, the legal issues remain open for adjudication in appropriate cases.

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