Facts of the Case

The Revenue filed Income Tax Appeal No. 680/2009 before the Delhi High Court. The matter was heard along with several connected appeals, namely ITA No. 430/2009, ITA No. 681/2009, ITA No. 328/2009 and ITA No. 332/2009.

At the time of consideration, the Court examined the monetary limits prescribed under CBDT Instruction No. 5/2008 dated 15.05.2008 governing the filing of departmental appeals.

Issues Involved

1.      Whether the Revenue’s appeal was maintainable when the tax effect involved in the appeal was below the monetary threshold prescribed under CBDT Instruction No. 5/2008 dated 15.05.2008?

2.      Whether the substantial questions of law proposed in the appeal required adjudication despite the low tax effect involved?

Petitioner’s Arguments

The Revenue/Appellant pursued the appeal before the High Court seeking consideration of the questions proposed in the memorandum of appeal.

Respondent’s Arguments

The order does not record the detailed submissions of the respondent. However, the matter was considered in the context of the monetary limits prescribed by CBDT for filing departmental appeals.

Court Findings

The Delhi High Court noted that in view of CBDT Instruction No. 5/2008 dated 15.05.2008, the tax effect involved in each of the appeals and in each assessment year was below Rs. 4,00,000.

Since the tax effect was below the prescribed monetary limit, the Court held that the appeals were not liable to be entertained.

The Court further observed that once the appeals themselves were not maintainable, the questions proposed in the appeals did not call for any decision.

Court Order

The Delhi High Court dismissed the appeals on the ground that the tax effect in each assessment year was below the monetary threshold prescribed under CBDT Instruction No. 5/2008 dated 15.05.2008.

Important Clarification

The dismissal was not on merits of the issues raised in the appeal.

The Court expressly observed that since the appeals were not entertained owing to the low tax effect, the questions proposed did not require adjudication.

Accordingly, the order cannot be treated as a decision on the substantive tax issues involved in the appeal.

Sections / Provisions Involved

• CBDT Instruction No. 5/2008 dated 15.05.2008
• Monetary Limit Policy for Filing Departmental Appeals
• Section 260A of the Income-tax Act, 1961 (Income Tax Appeals before High Court)

Link to download the order -

https://delhihighcourt.nic.in/app/case_number_pdf/2009:DHC:7204-DB/VJS27052009ITA6802009_145152.pdf

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