CBDTs low tax effect circular not applicable to matters having cascading effect
The High Court, relying on CBDTs Instruction No. 3/2011 dated 9-2-2011, dismissed the departments appeal as not maintainable on the ground that the tax effect was less than Rs. 10 lakhs. The department filed a SLP in the Supreme Court. HELD allowing the Petition:
Liberty is given to the Department to move the High Court pointing out that the Circular dated 9th February, 2011, should not be applied ipso facto, particularly, when the matter has a cascading effect. There are cases under the Income Tax Act, 1961, in which a common principle may be involved in subsequent group of matters or large number of matters. In our view, in such cases if attention of the High Court is drawn, the High Court will not apply the Circular ipso facto. For that purpose, liberty is granted to the Department to move the High Court in two weeks.