The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has dismissed the Income Tax Department’s miscellaneous applications seeking recall of earlier orders that had dismissed its appeals on account of low tax effect. 

The bench of Madhumita Roy (Judicial Member) and Krinwant Sahay (Accountant Member) has observed that the department could not invoke the exception carved out under the CBDT Circular relating to search and seizure cases when the appeals themselves had been decided on a pure jurisdictional issue, with no challenge on merits. 

The dispute arose from two miscellaneous applications filed by the Deputy Commissioner of Income Tax (DCIT), Central Circle-15, seeking recall of the Tribunal’s orders dated October 16, 2025, by which the Revenue’s appeals had been dismissed because the tax effect fell below the monetary threshold prescribed under the CBDT’s litigation management policy.

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The Department argued that the cases emanated from a search and seizure operation and therefore fell within the exception contained in Clause 3.1(h) of the CBDT Circular dated January 15, 2024, under which appeals involving search cases are excluded from the low tax effect restrictions. 

Appearing for the assessee, counsel contended that the Commissioner of Income Tax (Appeals) had allowed the appeals solely on the question of maintainability by relying upon the Delhi High Court’s judgment in PCIT v. Ojjus Healthcare Pvt. Ltd.

It was argued that the Revenue’s appeals before the Tribunal challenged only the jurisdictional findings of the CIT(A). Importantly, the Department had not raised any ground on the merits of the additions, despite the search proceedings and the materials allegedly seized during the search conducted on M/s Alankit Ltd. and related entities.

The assessee therefore submitted that the CBDT Circular’s exception relating to search cases had no application because the controversy before the Tribunal was confined exclusively to jurisdictional issues. Consequently, the miscellaneous applications deserved to be dismissed. 

After considering the rival submissions, the Tribunal observed that although the Department relied upon the CBDT Circular providing an exception for search-related matters, it failed to rebut the assessee’s contention that the appeals involved only jurisdictional questions.

The Bench noted that no ground on the merits of the assessment had been raised by the department. The appeals challenged only the jurisdictional findings recorded by the CIT(A). Such jurisdictional issues were not covered by the exception contained in the CBDT Circular relied upon by the Department.

The Tribunal therefore concluded that there was no error warranting recall of its earlier orders dismissing the appeals on account of low tax effect. 

Holding that the department had failed to establish any ground for recalling the earlier orders, the Tribunal dismissed both miscellaneous applications as devoid of merit.

The Bench held that in the absence of any challenge on the merits of the case, and since the issue involved only jurisdictional aspects falling outside the CBDT Circular’s exception, there was no justification for recalling the dismissal orders passed earlier.

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