PCIT Vs Agroha Fincap Ltd. (Delhi High Court)
Low Tax Effect Plea Rejected: Delhi HC Dismisses Review, Holds Accommodation Entry Cases Fall in CBDT Exception
The Delhi High Court, in PCIT-1 vs Agroha Fincap Ltd. (Review Petition No. 567/2025 in ITA No. 60/2024, judgment dated 23.12.2025), dismissed the assessee’s review petition seeking recall of the High Court’s earlier judgment dated 06.10.2025. The review was primarily sought on the ground that the Revenue appeal before the High Court was not maintainable due to low tax effect, in view of CBDT Circulars prescribing monetary limits.
The Court held that the earlier Circulars on low tax effect stood superseded by subsequent CBDT Circulars, culminating in Circular dated 15.03.2024 (and Circular No. 09/2024 dated 17.09.2025), which carved out specific exceptions. One such exception, para 3.1(h), covers cases involving organised tax evasion, bogus capital gains/losses and accommodation entries. On facts, the Court found that the Revenue’s case before the AO and CIT(A) was squarely based on allegations of accommodation entries, and therefore clearly fell within exception (h), rendering the low tax effect argument untenable.
The High Court also rejected the assessee’s plea that the matter should be remanded to ITAT for adjudication of other grounds. It noted that before the Tribunal, the assessee had pressed only the legal ground relating to defective and mechanical approval u/s 151, on which the reassessment itself was quashed, and no submissions were made on other grounds. Consequently, there was no occasion or requirement for ITAT to adjudicate remaining grounds.
Holding that no error apparent on record was made out, the Court dismissed the review petition as bereft of merit, thereby affirming that Revenue appeals involving accommodation entries are maintainable notwithstanding low tax effect.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
