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August 2015

Appeal to the High Court – Circular No. 3 of 2011 (which stipulates monetary limit for appeals by Department) should not be applied ipso facto, particularly, when the matter has cascading effect.

By Kishore Karia Chartered Accountant Atul Jasani Advocate
Reading Time 1 mins
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CIT vs. Century Park (2015) 373 ITR 32 (SC)

The High Court dismissed the appeal filed by the Revenue as not maintainable without going into merits since the net tax effect in respect of the subject matter of the appeal was less than Rs.10,00,000 in view of the Circular No.3 of 2011. On appeal by the Revenue, the Supreme Court [vide order dated 1st April, 2015] granted liberty to the Department to move the High Court to point out that the Circular dated 9th February, 2011, should not be applied ipso facto, particularly, when the matter has a cascading effect. The Supreme Court observed that there are cases under the Income-tax Act, 1961, in which common principle may be involved in subsequent group of matters or large number of matters. According to the Supreme Court, in such cases if the attention of the High Court is drawn, the High Court would not apply the Circular ipso facto.

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