DIRECTOR OF INCOME TAX, CIRCLE 26(1) NEW DELHI versus S.R.M.B. DAIRY FARMING (P) LTD.

Citation: [2017] 11 S.C.R. 1118 · Decided: 23-11-2017 · Supreme Court of India · Bench: R.F. NARIMAN · Disposal: Dismissed
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Judgment (excerpt)

[2017] 11 S.C.R. 1118 
A 
DIRECTOR OF INCOME TAX, CIRCLE 26(1) NEW DELHI 
B 
c 
v. 
S.R.M.B. DAIRY FARMING (P) LTD. 
(Civil Appeal No. 19650 of2017) 
NOVEMBER 23, 2017 
[R. F. NARIMAN AND SANJAY KISHAN KAUL, JJ.] 
Income Tax Act, 1961: 
Circular/Government order/Notification - Circular No.3 of 
2011 dated 9.2.2011 issued by IT department providing that appeals 
are not to be filed before the High Courts where tax impact was less 
than Rs.JO lakhs - Applicability of the circular to pending matters 
- Held: Circular dated 9.2.2011 would apply even to pending 
matters but subject to the two caveats provided in order passed by 
D a three-Judge Bench of Supreme Court in Surya Herbal case - The 
two caveats are: (i) Circular dated 9.2.2011 should not be applied 
by High Courts ipso facto when the matter has a cascading effect; 
(ii) where common principles may be involved in subsequent group 
of matters or large number of matters - Order passed in Surya 
E 
Herbal case holds the field - Appeals of Revenue accordingly 
dismissed. 
National Litigation Policy, 2011 - Purpose of - Discussed. 
Dismissing the appeals, the Court 
F 
HELD: The matter has been squarely put to rest taking 
further care of the interests of the Revenue by the order passed 
by the three Judges Bench of this Court in Surya Herbal Ltd., 
which had put two caveats even to the retrospective application 
of the Circular. The said view of the three Judges Bench would 
G hold water and Circular would apply even to pending matters but 
subject to the two caveats provided in Surya Herbal Ltd. case. 
[Para 25) [1133-G; 1134-A-C] 
H 
CIT Central-Ill v. Surya Herbal Ltd. (2011) 15 SCC 
482 - Followed 
1118 
. DIRECTOR OF LT, CIRCLE 26(1) NEW DELHI v. S.R.M.B. 
1119 
DAIRY FARMING (P) LTD. 
Suchitra Components Ltd. v. Commissioner of Central 
A 
· 
Excise, Guntur 2007 (208) ELT 321 (SC); 
Commissioner of Central Excise, Bangalore v. Mysore 
Electricals Industries Ltd. 2006 (204) ELT 517 (SC) -
relied on. 
Commissioner of Income Tax, Bangalore v. Ranka & 
Ranka 2012(284) ELT 185 (Kar.); Commissioner of 
Income Tax v. Pithwa Engg. Works (2005) 276 ITR 519 
(Born.); Com111:issioner of Income Tax v. Madhukar K. 
Inamdar (HUF) (2009) 318 ITR 149 (Born); 
Commissioner of Income Tax v. As/wk Kumar Manibhai 
Patel & Co. (2009) 317 ITR 386 (MP); Commissioner 
of Income Tax v. P.S. Jain & Co. (2011) 335 ITR 591 
(Delhi); Commissioner of Income Tax v. Varindera 
Construction Co. (2011) 331 ITR 449 (P&H)(FB); 
Commissioner of Income Tax v. Navbharat Explosives 
Co. P. Ltd. (2011) 337 ITR 515 (Chhattisgarh); 
Commissioner of Income Tax v. Kodanand 'Tea Estates 
Co. (2005) 275 ITR 244 (Mad.); CWT v. John L. 
Chacko/a (2011) 337 ITR 385 (Ker); Commissioner 
of Income Tax-VII, New Delhi v. Suman Dhamija (2015) 
16 SCC 176; Commissioner of Income Tax & Am: V. 
Century Park (2015) 14 SCC 704 - referred to. 
Case Law Reference 
(2011) 15 sec 482 
followed 
Paras 19, 25 
2012(284) ELT 185 (Kar.) 
referred to 
Paras 
(2005) 276 ITR 519 (Born.) 
referred to 
Para 14 
(2009) 318 ITR 149 (Born) 
referred to 
Para 15 
(2009) 317 ITR 386 (MP) 
referred to 
Para 16 
(2011) 335 ITR 591 (Delhi) 
referred to 
Para 16 
(2011) 331 ITR 449 (P&H)(FB) 
referred to 
Para 17 
(2011) 337 ITR 515 (Chhattisgarh) referred to 
Para 18 
(2005) 275 ITR 244 (Mad.) 
referred to 
Para 18 
(2011) 337 ITR 385 (Ker) 
referred to 
Para 18 
B 
c 
D 
E 
F 
a· 
H 
1120 
SUPREME COURT REPORTS 
[2017] ll S.C.R. 
A 
(2015) 16 sec 176 
(2015) 14 sec 104 
referred to 
referred to 
relied on 
relied on 
Para 21 
Para 22 
Para24 
Para 24 
B 
2007 (208) ELT 321 (SC) 
2006 (204) ELT 517 (SC) 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 19650 
of2017. 
From the Judgment and Order dated 19.04.2011 of the High Court 
C of Delhi at New Delhi in ITA No. 4412005 
D 
WITH 
CivilAppealNo.19651 of2017. 
Arjjit Prasad, T. M. Singh, Ms. N. Annapoomi, Mrs. Anil Katiyar, 
Advs for the Appellant. 
S. B. Upadhyay, Sr. Adv, Pawan Upadhyay, Sarvjit Pratap Singh, 
Nishant Kr., Ms. Sharmila Upadhyay, Salil Kapoor, Sumit Lalchandani, 
Kamal Mohan Gupta, Advs for the Respondent. 
The Judgment of the Court was delivered by 
E 
SANJAY KISHAN KAUL, J. 1. Leave granted. 
2. The propensity of Government Departments and public 
authorities to keep litigating through different tiers of judicial scrutiny is 
one of the reasons for docket explosion. The Income Tax Department 
of the Government oflndia is one of the major litigants. There are two 
F depa
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