What did the High Court hold?

The High Court dismissed the appeal, noting that the tax effect was significantly below the monetary limits prescribed by the CBDT for filing appeals. The court left the question of law open for determination in an appropriate case.

The appeal filed by the Commissioner of Income Tax involved a tax effect of less than Rs. 86,000. The appeal was filed before the High Court, where the monetary limit for departmental appeals was Rs. 2 lakhs, later revised to Rs. 4 lakhs.

What were the issues?

Whether the appeal should be entertained given the low tax effect, despite potential recurring questions of law. The applicability of CBDT instructions regarding monetary limits for filing appeals was central.

CIT vs Kiran Securities P.Ltd | Delhi High Court 2007

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HIGH COURT OF DELHI : NEW DELHI

+ ITA No. 484 of 2007

% Judgment delivered on: May 22, 2007

COMMISSIONER OF INCOME TAX DEL ..... Appellant Through Mr. R.D. Jolly

versus

KIRAN SECURITIES P.LTD. ..... Respondent Through

Coram:

HON'BLE MR. JUSTICE MADAN B. LOKUR HON'BLE MR. JUSTICE V.B. GUPTA

Whether the Reporters of local papers may be allowed to see the judgment?

To be referred to Reporter or not?

Whether the judgment should be reported in the Digest?

Page 1 of 5

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MADAN B. LOKUR, J. (ORAL)

The tax effect in this case is hardly Rs.86,000/-.

- 2. Our attention has been drawn to Instruction No.1979 dated 27th March, 2000 issued by the Government of India, Ministry of Finance, Department of Revenue (Central Board of Direct Taxes). This Instruction pertains to monetary limits for filing departmental appeals / references before the Income Tax Appellate Tribunal, High Courts and Supreme Court. - 3. It has been mentioned in the Instruction that the Central Board of Direct Taxes (CBDT) has decided that appeals will be filed only in cases where the tax effect exceeds the revised monetary limits which, in respect of appeals filed in the High Court under Section 260A of the Income Tax Act, 1961 is Rs.2 lakhs. It has also been mentioned in the Instruction that the monetary limits would apply with reference to each case taken singly. This has been clarified as follows: -

"In other words, in group cases, each case should individually

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2007:DHC:10146-DB

satisfy the new monetary limits. The working out of moneta limits will therefore not take into consideration the cumulative revenue effect as envisaged in Board's earlier Instruction referred to above."

This Instruction was subsequently modified by Instruction No. 1985 dated 29th June, 2000. The expression "each case taken singly" has been explained to mean that if a case pertaining to two (or more) assessment years is decided, the monetary limit in Instruction No. 1979 would apply taking together both (or more) assessment years.

A further Instruction being Direct Tax Instruction No. 2 dated 24th October, 2005 has since been issued which raises the monetary limit for an appeal under Section 260A of the Act to Rs.4 lakhs. In this Instruction, it has also been stated that the CBDT has decided that in cases involving a substantial question of law of importance as well as in cases where some question of law will repeatedly arise, either in the concerned case or in similar cases, the cases should be individually considered on merits without being hindered by the monetary limits.

ITA No.484/2007 Page 3 of 5

2007:DHC:10146-DB

should file an appeal. In other cases, the Revenue may accept a unfavourable order without foreclosing its rights to have that order set aside in an appropriate case.

- 9. In so far as the present case is concerned, the tax effect is well below the monetary limits laid down by the CBDT even for filing an appeal before the Tribunal. Therefore, even if the question arises (and it has actually arisen) in several other cases, if this case is considered individually, as is the intention of the Instructions issued by the CBDT, then it is not such a case as would compel a departure from the norms laid down by the CBDT. - 10. Consequently, while dismissing this appeal on its own facts, we leave the question of law open for determination in an appropriate case.

MADAN B. LOKUR, J

MAY 22, 2007

kapil

v. b. gupta, j

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COMMISSIONER OF INCOME TAX DEL vs. KIRAN SECURITIES P.LTD.

What did the High Court hold?

What were the facts?

What were the issues?

Which sections of the Income-tax Act were involved?

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