Facts of the Case

The Revenue filed two separate appeals before the Delhi High Court under the Income Tax Act. During the hearing, the learned counsel for the Revenue submitted that the tax effect involved in both appeals was below ₹50,00,000, which falls below the monetary threshold prescribed under CBDT Circular No. 3/2018 dated 11.07.2018.

Issues Involved

  1. Whether the appeals filed by the Revenue are maintainable when the tax effect is below the prescribed monetary limit.
  2. Whether dismissal of such appeals would affect the determination of legal questions involved.

Petitioner’s (Revenue’s) Arguments

  • The Revenue acknowledged that the tax effect in the present appeals is below ₹50 lakh.
  • In view of the binding CBDT Circular No. 3/2018, the appeals may be treated as not pressed.

Respondent’s Arguments

  • The respondents were either unrepresented or represented through counsel; however, no substantial arguments were recorded, as the matter was disposed of based on the Revenue’s statement.

Court’s Findings / Order

  • The Hon’ble Delhi High Court recorded the statement of the Revenue.
  • The Court held that:
    • Since the tax effect is below ₹50,00,000, the appeals are disposed of as not pressed.
    • The question of law is left open.
  • The Court further clarified that it has not made any observations on the merits of the case.

Important Clarification by Court

  • Dismissal of the appeal is procedural due to low tax effect, not on merits.
  • No precedent is created on substantive legal issues involved in the case.
  • The Revenue is not barred from raising similar legal questions in appropriate cases where tax effect exceeds the prescribed limit.

Link to download the order -https://delhihighcourt.nic.in/app/case_number_pdf/2018:DHC:8322-DB/SKN25072018ITA7672018_154838.pdf

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