PR. COMMISSIONER OF INCOME TAX -15 vs. RAKESH DIVEDI

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ITA/634/2026HC DelhiDLHC01036055202612 October 2026Bench: HON'BLE MR. JUSTICE SUBRAMONIUM PRASAD,HON'BLE MS. JUSTICE RENU BHATNAGAR2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court noted that the tax effect in the matter was less than Rs. 2 crores. The Revenue's counsel stated that prosecution had been initiated, bringing it within Clause (d) of Circular No. 5/2024. However, the assessee's counsel informed the Court that the prosecution had been dropped by an order dated 03.01.2026. In light of the tax effect being below Rs. 2 crores and the prosecution having been dropped, the Court was not inclined to proceed further with the appeal. The appeal was disposed of on these grounds. The Court explicitly stated that the question of law was left open.

What were the facts?

The Revenue, Pr. Commissioner of Income Tax -15, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated 09.01.2026 passed by the Income Tax Appellate Tribunal (ITAT), New Delhi, in ITA No. 3290/DEL/2025 for Assessment Year 2009-10. The appeal concerned Rakesh Divedi (the assessee). During the proceedings, it was pointed out to the Revenue's counsel that the tax effect was less than Rs. 2 crores. The Revenue's counsel contended that an exception applied due to the initiation of prosecution against the respondent, as per Clause (d) of Circular No. 5/2024. However, the assessee's counsel stated that the prosecution had been dropped by an order dated 03.01.2026.

What were the issues?

1. Whether the appeal filed by the Revenue is maintainable given that the tax effect is less than Rs. 2 crores, and if the exception under Clause (d) of Circular No. 5/2024, relating to the initiation of prosecution, applies. Assessee's Contentions: The assessee argued that the prosecution against him had been dropped by an order dated 03.01.2026. This fact, coupled with the tax effect being below the threshold, would render the appeal non-maintainable under the prevailing circulars. Revenue's Contentions: The Revenue contended that the appeal was maintainable because prosecution had been initiated against the respondent, which falls under Clause (d) of Circular No. 5/2024, providing an exception to the monetary limit for filing appeals.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

$~52 * IN THE HIGH COURT OF DELHI AT NEW DELHI # CNR No. DLHC010360552026 + ITA 634/2026 & CM APPL. 51849/2026

PR. COMMISSIONER OF INCOME TAX -15 .....Appellant Through: Mr. Ruchir Bhatia, SSC, Mr. Anant Mann, JSC and Mr. Pratyaksh Gupta, JSC.

versus

RAKESH DIVEDI

.....Respondent Through: Mr. Ravi Pratap Mall, Advocate.

CORAM:

HON'BLE MR. JUSTICE SUBRAMONIUM PRASAD

HON'BLE MS. JUSTICE RENU BHATNAGAR

O R D E R %

12.10.2026

1.

The present appeal has been filed under Section 260A of the Income Tax Act, 1961 against the order dated 09.01.2026 passed by the learned Income Tax Appellate Tribunal, New Delhi in ITA No. 3290/DEL/2025 for the Assessment Year 2009-10. 2. It was pointed out to the counsel for the appellant-Revenue that the tax effect in the present matter is less than Rs. 2 crores. The counsel for the appellant states that prosecution has been initiated against the respondent and therefore, it comes within Clause (d) in Circular No. 5/2024. 3. Learned counsel appearing for the respondent states that the prosecution has been dropped vide order dated 03.01.2026. 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 15/10/2026 at 11:34:49

4.

In view of the above and in view of the fact that tax effect is less than Rs. 2 crores, this Court is not inclined to proceed further. 5. The appeal is disposed of in the aforesaid terms. 6. We make it clear that the question of law is left open.

SUBRAMONIUM PRASAD, J

RENU BHATNAGAR, J OCTOBER 12, 2026/ng

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 15/10/2026 at 11:34:49

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