Facts of the Case

The Revenue filed ITA No. 60/2024 against Agroha Fincap Ltd., which was decided by the Delhi High Court on 06.10.2025. Thereafter, the assessee filed Review Petition No. 567/2025 seeking review of the judgment primarily on the ground that the Revenue’s appeal was not maintainable due to low tax effect in view of CBDT Circular No. 3/2018 dated 11.07.2018, subsequently enhanced by Circular No. 17/2019 dated 08.08.2019 and superseded by Circular dated 15.03.2024. It was contended that the Court had not adjudicated this objection in the main judgment. The assessee also sought remand of the matter to the ITAT on the plea that other grounds raised before the Tribunal were not adjudicated.

Issues Involved

Whether the Revenue’s appeal before the High Court was barred by low tax effect in view of CBDT circulars, whether the case fell within the exception carved out for organised tax evasion and accommodation entries, and whether any error apparent on record existed warranting review of the judgment dated 06.10.2025.

Petitioner’s Arguments

The assessee contended that the tax effect was below the monetary threshold prescribed by CBDT circulars and therefore the appeal itself was not maintainable. It was further argued that the exception under para 3.1(h) of Circular No. 09/2024 dated 17.09.2025 could not be retrospectively applied to an appeal filed and admitted in January 2024. The assessee also urged that since other grounds were raised before the ITAT, the matter ought to be remanded for adjudication of those grounds.

Respondent’s Arguments

The Revenue opposed the review petition, contending that the case squarely involved accommodation entries, which fell within the recognised exception to the low tax effect circulars. It was argued that the Tribunal had quashed the reassessment only on the legal issue relating to defective approval under Section 151, and no other grounds were pressed by the assessee. Therefore, no question of remand arose, and there was no error apparent on the face of the record warranting review.

Court Order / Findings

The Delhi High Court held that the circular dated 11.07.2018 stood replaced and superseded by subsequent circulars, culminating in Circular dated 15.03.2024, which expressly carved out exceptions for cases involving organised tax evasion, including accommodation entries. Upon examining the record, the Court found that the Revenue’s case before the Assessing Officer and the CIT(A) was clearly one of accommodation entries and therefore fell within exception (h).

The Court further noted that although the assessee’s counsel had raised the low tax effect objection earlier, the omission to expressly record a finding on that aspect was inadvertent and did not alter the conclusion. On the plea for remand, the Court observed that the ITAT itself recorded that the assessee had pressed only the legal ground relating to defective approval under Section 151, and no submissions were made on other grounds. Consequently, no case for remand was made out.

Important Clarification

The Court clarified that where a case involves accommodation entries or organised tax evasion, the Revenue’s appeal is maintainable notwithstanding low tax effect in view of CBDT circular exceptions. It further clarified that review jurisdiction cannot be invoked to re-argue issues already decided or to raise grounds not pressed earlier.

Final Outcome

The review petition was dismissed. The Delhi High Court held that the appeal filed by the Revenue was maintainable despite low tax effect as the case fell within the accommodation entry exception, and that no error apparent on the face of the record existed to warrant review of the judgment dated 06.10.2025.

Link to download the order - https://www.mytaxexpert.co.in/uploads/1769503375_PR.COMMISSIONEROFINCOMETAX1VsAGROHAFINCAPLTD..pdf

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