{"id":3620,"date":"2011-09-01T00:08:06","date_gmt":"2011-08-31T18:38:06","guid":{"rendered":"http:\/\/itatonline.org\/archives\/?p=3620"},"modified":"2011-09-01T00:08:06","modified_gmt":"2011-08-31T18:38:06","slug":"cit-vs-surya-herbal-ltd-supreme-court-cbdt-low-tax-effect-circular-not-applicable-to-matters-having-cascading-effect","status":"publish","type":"post","link":"https:\/\/itatonline.org\/archives\/cit-vs-surya-herbal-ltd-supreme-court-cbdt-low-tax-effect-circular-not-applicable-to-matters-having-cascading-effect\/","title":{"rendered":"CIT vs. Surya Herbal Ltd (Supreme Court)"},"content":{"rendered":"\n\n
Click here to download the judgement (surya_herbal_low_tax_effect_circular.pdf) <\/strong> <\/a><\/p><\/td>\n<\/tr>\n<\/table>\n


\nCBDT’s low tax effect circular not applicable to matters having “cascading effect”
\n<\/strong><\/p>\n

The High Court, relying on CBDT’s Instruction No. 3\/2011 dated 9-2-2011<\/a><\/strong>, dismissed the department’s 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:<\/p>\n

Liberty is given to the Department to move the High Court pointing out that the Circular dated 9th February, 2011<\/a>, should not be applied ipso facto, particularly, when the matter has a cascading effect<\/strong>. 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<\/strong>. In our view, in such cases if attention of the High Court is drawn, the High Court will not apply the Circular ipso facto<\/strong>. For that purpose, liberty is granted to the Department to move the High Court in two weeks.<\/p><\/blockquote>\n

\nNote<\/strong>: Impliedly, it is accepted that the Circular applies to pending matters as held in Delhi Race Club<\/a><\/strong> (Delhi High Court) & Laxmi Jewel<\/a><\/strong> (ITAT Mumbai). But see CBDT’s letter dated 02.09.2011<\/a><\/strong>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Liberty is given to the Department to move the High Court pointing out that the Circular dated 9th February, 2011<\/a>, should not be applied ipso facto, particularly, when the matter has a cascading effect<\/strong>. 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<\/strong>. In our view, in such cases if attention of the High Court is drawn, the High Court will not apply the Circular ipso facto<\/strong>. For that purpose, liberty is granted to the Department to move the High Court in two weeks<\/p>\n

Read more ›<\/a><\/div>\n

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