SC Asks HC to consider whether Low Tax Effect Circular has retrospective effect

Income Tax  Department filed an appeal u/s 260A in 2006 where the tax effect was less than Rs. 10 lakhs.  High Court, relying on Instruction No. 3/2011 Dated 9-2-2011  dismissed the appeal as not maintainable. Income Tax  Department  challenged the decision on the ground that para 11 of Instruction No. 3/2011 Dated 9-2-2011 made it clear that it would apply only to appeals filed on or after 9.2.2011 and not to appeals filed earlier.

On Appeal Supreme Court held as under:

The tax effect in the present appeal is less than Rs. 10 lakhs. As per the new guidelines of the CBDT, in those cases where the tax effect is less than Rs. 10 lakhs, appeal is not to be filed

SUPREME COURT OF INDIA

Petition(s) for Special Leave to Appeal (Civil)……….. /2012

(CC 21705/2011)

(From the judgement and order dated 21/04/2011 in ITA No. 1468/2006 of The HIGH COURT OF DELHI)

C.I.T., DELHI                                                     

VERSUS

M/S VIRGO MARKETING PVT. LTD.       

(With appln(s) for delay in filing SLP and office report)

Date: 06/01/2012 This Petition was called on for hearing today.

CORAM :

HON’BLE THE CHIEF JUSTICE

HONORABLE MR. JUSTICE A.K. PATNAIK

HONORABLE MR. JUSTICE SWATANTER KUMAR

Delay condoned.

In view of Para 11 of CBDT Instruction No.3/2011 dated 9th February, 2011, liberty is granted to the Department to move the High Court by way of review within four weeks.

—————————————————————