Supreme Court Grants SLP Against High Court Order Dismissing Revenue’s Appeal On Low Tax Effect Under Black Money Act

Supreme Court Grants SLP Against High Court Order Dismissing Revenue’s Appeal On Low Tax Effect Under Black Money Act

• Penalty Imposition: The Revenue initiated proceedings and levied a penalty of ₹10 lakhs on the assessee under Section 43 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.
• Low Tax Effect: The tax effect in the departmental appeal was limited solely to the penalty amount of ₹10 lakhs.
• CBDT Revised Thresholds: Under CBDT Circular No. 5 of 2024, the monetary limits for the Department to file appeals before ITATs, High Courts, and the Supreme Court were enhanced, raising the High Court appeal limit from ₹1 crore to ₹2 crores.
• High Court Dismissal: The High Court dismissed the Revenue’s departmental appeal as non-maintainable under Section 260A of the Income-tax Act, 1961 (corresponding to Section 365 of the Income-tax Act, 2025), holding that the ₹10 lakh tax effect fell far below the ₹2 crore threshold prescribed in Circular No. 5 of 2024.
• Appeal to Apex Court: The Revenue filed a Special Leave Petition (SLP) before the Supreme Court challenging the High Court’s dismissal.

• SLP Granted: The Supreme Court granted Special Leave to Appeal to the Revenue against the order of the High Court [Para 1].
• Outcome in Favor of Revenue: The issue was decided in favor of the Revenue.

• Interplay Between IT Act Circulars and Black Money Act: The Supreme Court’s grant of SLP signals a potential need to examine whether general CBDT monetary limit circulars issued for Income-tax Act litigation automatically apply to specialized proceedings under the Black Money Act, 2015.
• Scope of Exceptional Clauses: The matter leaves open for higher judicial determination whether penalties imposed for undisclosed foreign assets fall within the exceptions to low-tax-effect dismissal thresholds.
• Substantive Review Preserved: Dismissal of departmental appeals purely on monetary limits at the High Court level can be subjected to review by the Apex Court where statutory interpretation of strict tax evasion laws is involved.