The High Court held that where a substantial question of law is involved, the mere fact that a monetary limit had been prescribed for filing appeals by the Department would not be a bar to deciding the appeal, and that even otherwise, this was an exceptional case where the Department was justified in filing the appeal, and proceeded to decide the appeal on the merits, answering the questions of law in favour of the Department, on appeal to the Supreme Court. Allowing the appeal the Court held that instruction No. 5 of 2008 dt. 15-5 2008 is applicable to pending matters, subject to two caveats provided in CIT v. Surya Herbal Ltd. (2013) 350 ITR 300 (SC). Followed DIT v. S.R.M B. Dairy Farming (P) Ltd. (2018) 400 ITR 9 (SC). The judgment of the High Court was set aside and the Department’s appeals before the High Court treated as dismissed because of low tax effect, leaving the questions of law open. (AY. 1991-92 to 2001-02)
S. C. Naregal v. CIT (2019) 418 ITR 455/ 267 Taxman 563/ 311 CTR 849/ 184 DTR 247 (SC) Editorial : Decision in CIT v. S.C. Naregal (2010) 329 ITR 615 (Karn.) (HC) is set aside because of low tax effect, leaving the questions of law open.
S. 260A : Appeal-High Court–Monetary limits–Pendency of appeals-No cascading effect nor issue involved in group matters-Appeals of department is dismissed–Question is kept open. [S. 268A]