In Brief
The Income Tax Department sought to appeal various assessments to higher courts despite tax impacts below Rs. 10 lakhs under Instruction No. 3 of 2011. The Supreme Court held that this Instruction applies retrospectively to appeals pending at its date of issuance, treating it as a beneficial circular applying retroactively to protect assessees. However, the Department may seek exemptions where the matter has cascading effects or involves common legal principles affecting numerous other cases. This balances the National Litigation Policy's goal of reducing frivolous government litigation with protecting substantial Revenue interests and judicial time.
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