Whether monetary limits for not filing appeals have very limited scope?

Respected Members

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Short note of today's case law for quick reference:

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[2024] 466 ITR 707 (Del)

[IN THE DELHI HIGH COURT]

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PRINCIPAL COMMISSIONER OF INCOME-TAX

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VERIZON COMMUNICATIONS INDIA PVT. LTD.

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RAJIV SHAKDHER and GIRISH KATHPALIA JJ.

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November 16, 2023.

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1. From a bare perusal of section 254(2) of the Income-tax Act, 1961 it is quite clear that if there is patent, manifest and self-evident error in the order passed by the Tribunal which does not require elaborate discussion of evidence or argument to establish it can be said to be an error apparent on the face of the record and can be corrected while exercising jurisdiction under the Act.

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2. Under the CBDT circular no. 3 of 2018 dated 11.07.2018, no Department appeals are to be filed against relief given by the Commissioner (Appeals) before the Tribunal unless the tax effect, excluding interest, exceeds Rs. 20 lakhs and it further states that the instructions will apply retrospectively to the pending appeals also.

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3. Circular No. 3 of 2018 dated 11.07.2018 was amended subsequently by CBDT by circular dated 20.08.2018 amending para 10 of circular no. 3 of 2018 and clause 10(e) was inserted to the effect that adverse judgments relating to certain issues should be contested on merits notwithstanding that the tax effect was less than the monetary limits specified in para 3 above or there is no tax effect. One of these was where the addition was based on information received from external sources of law enforcement agencies such as the Central Bureau of Investigation, Enforcement Directorate, Department of Revenue Intelligence, Serious Fraud Investigation Office or the Directorate General of Goods and Services Tax Intelligence.

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4. On January 7, 2019 while dismissing the appeal the Tribunal had taken into consideration the circular dated 11.07.2018 but had not taken into consideration the fact that the circular was amended on 20.08.2018 and subsequently clause 10(e) had been inserted which clearly provided that if an addition was based on information received from external sources in the nature of law enforcement agencies the low tax effect would be immaterial.

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5. The assessment order passed by the assessing authority dated 29.12.2006 clearly showed that the undisclosed income belonging to the assessee was as per the investigation of CBI.

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6. Thus, the Tribunal had not committed any illegality or irregularity in allowing the miscellaneous application filed by the Department and recalling its earlier order.