COMMISSIONER OF INCOME TAX vs. M/S DIWAKAR ENGINEERS LTD.

PDF · subscribers

ITA/1118/2005HC DelhiDLHC01058969200503 February 2026Bench: HON'BLE MR. JUSTICE VINOD KUMAR,HON'BLE MR. JUSTICE DINESH MEHTA2 pages

AI SummaryDismissed

What did the High Court hold?

The High Court of Delhi, on perusal of the record, noted that the assessee's income remained a loss of Rs.(-)7,59,463/- even after the additions made by the Assessing Officer. Consequently, the Court found that there could not be any question of a tax effect exceeding Rs.2 crores in the present appeal. In light of CBDT Circular No.5/2024 dated 15.03.2024 read with Circular No. 9/2024 dated 17.09.2024, the appeal was dismissed. The Court granted the appellant-department liberty to move an application for revival of the appeal in case it falls within the exceptions mentioned in the circulars. The ratio decidendi is that appeals with negligible tax effect, as per prevailing CBDT circulars, are to be dismissed.

What were the facts?

The assessee, M/s Diwakar Engineers Ltd., filed a return showing a loss of Rs.1,37,77,000/- for the assessment year not specified. The Assessing Officer made additions, reducing the loss and assessing the income at Rs.(-)7,59,463/-. Specifically, an expenditure of Rs.3,66,924.75/- and a loss on imported material of Rs.1,06,17,661/- were disallowed and added to the income. Despite these additions, the assessee's income remained a negative figure. The Commissioner of Income Tax (Appellant) filed an appeal before the High Court of Delhi against the order of the Income Tax Appellate Tribunal (presumably, though not explicitly stated). The appeal was filed in 2005.

What were the issues?

1. Whether the appeal filed by the Revenue is maintainable in light of the assessed income remaining a loss, and consequently, the tax effect being negligible, considering the CBDT Circulars No.5/2024 and 9/2024. Assessee's Contentions: Not recorded in the judgment. Revenue's Contentions: The Revenue, through Mr. Sunil Agarwal, SSC, argued that the appeal should be dismissed in light of CBDT Circular No.5/2024 dated 15.03.2024 read with Circular No. 9/2024 dated 17.09.2024. These circulars likely pertain to monetary limits for filing appeals and the conditions under which appeals should be withdrawn or not pressed. The Revenue implicitly acknowledged that the tax effect was not substantial enough to warrant further appeal.

AI-generated summary — verify with the full judgment below

$~72 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 1118/2005

COMMISSIONER OF INCOME TAX

.....Appellant

Through: Mr. Sunil Agarwal, SSC

versus

M/S DIWAKAR ENGINEERS LTD.

.....Respondent

Through: Appearance not given

CORAM:

HON'BLE MR. JUSTICE DINESH MEHTA

HON'BLE MR. JUSTICE VINOD KUMAR

O R D E R %

03.02.2026 1. On perusal of the record, particularly the assessment order dated 27.12.1993, we find that the assessee had filed a return showing a loss of Rs.1,37,77,000/- and after the addition made by the Assessing Officer the loss was reduced and the income was assessed at Rs.(-)7,59,463/-. 2. It is therefore clear that an expenditure of Rs.3,66,924.75/- and the loss of imported material of Rs.1,06,17,661/- was disallowed to be added to the income of the respondent-assessee and even thereafter, the income of the respondent-assessee remained Rs.(-)7,59,463/- a negative profit. 3. Such being a position, there cannot be any question of Tax effect of more than Rs.2 crores in the present appeal. 4. In light of CBDT Circular No.5/2024 dated 15.03.2024 read with Circular No. 9/2024 dated 17.09.2024, the appeal is thus, dismissed. This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 05/02/2026 at 12:17:34

However, with a liberty to the appellant-department to move application for revival of the appeal in case it falls in the exceptions.

DINESH MEHTA, J.

VINOD KUMAR, J. FEBRUARY 3, 2026/sr

This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 05/02/2026 at 12:17:34

Recent GST High Court judgments

Search GST case law →