DR SHRI RAJENDRA KUMAR SODANI, Indore V. The ACIT - 5(1), Indore

CO 29/IND/2015

• Counselvise Citation: [2016] 123 COUNSELVISE.COM (IT) 2146 (ITAT-INDORE)
• Duration Of Justice: 10 month(s) 3 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 14-03-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 14-03-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 11-05-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Keywords: Audit objection; Retrospective amendment; Question of law; Tax effect
• Section: 260A; 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI B.C.MEENA, ACCOUNTANT MEMBER I.T.A.NO.177/IND/2015 A.Y. : 2011-12. ACIT, 5(1), DR.SHRI RAJENDRA KUMAR SODANI, INDORE. VS INDORE. APPELLANT RESPONDENT PAN NO. AERPS1461E C.O. NO.29/IND/2015 (ARISING OUT OF I.T.A.NO.177/IND/2015 ) A.Y. : 2011-12. DR.SHRI RAJENDRA KUMAR SODANI, INDORE. VS ACIT, 5(1), INDORE. CROSS OBJECTOR RESPONDENT DEPARTMENT BY : SHRI R. A. VERMA, DR ASSESSEE BY : NONE. DATE OF HEARING : 14 .0 3 .2016 DATE OF PRONOUNCEMENT : 14 .0 3 .2016 ACIT, 5(1), INDORE VS. DR. SHRI RAJENDRA KUMAR SODA NI I.T.A.NO. 177/IND/2015 A.Y. 2011-12 AND C.O. NO.29/IND/2015 DR. SHRI RAJENDRA KUMAR SODNAI VS. ACIT, 5(1), INDORE A.Y. 2011-12 2 2 O R D E R PER D.T.GARASIA, J.M. APPEAL BY THE REVENUE AND CROSS OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF CIT(A)-I I, INDORE DATED. 28.11.2014, FOR THE ASSESSMENT YEAR 2011-12. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE. 3. WE HAVE HEARD THE LD. DR. WE FIND THAT RECENTLY THE CBDT VIDE CIRCULAR NO. 21/20145 ISSUED ON 10.12.201 5 HAS REVISED THE MONETARY LIMIT FOR FILING OF APPEAL BEF ORE ITAT FIXING THE TAX EFFECT LIMIT AT RS.10 LACS. THE SAID CIRCU LAR IS REPRODUCED HEREUNDER FOR READY REFERENCE :- CIRCULAR NO. 21/2015 F NO 279/MISC. 142/2007-ITJ (PT) CENTRAL BOARD DIRECT TAXES NEW DELHI THE 10 TH DECEMBER, 2015 SUBJECT : REVISION OF MONETARY LIMITS FOR FIL ING OF APPEALS BY THE DEPARTMENT BEFORE INCOME TAX APPELLATE TRI BUNAL AND HIGH COURTS AND SLP BEFORE SUPREME COURT MEAS URES FOR REDUCING LITIGATION REG. REFERENCE IS INVITED TO BOARDS INSTRUCTION NO 5/2014 DATED 10.07.2014 WHEREIN MONETARY LIMITS AND OTHER CONDITIONS FOR FILING DEPARTMENTAL APPEALS (IN INCO ME-TAX MATTERS) BEFORE APPELLATE TRIBUNAL AND HIGH COURTS AND SLP BEFORE THE SUPREME COURT WERE SPECIFIED. 2. IN SUPERSESSION OF THE ABOVE INSTRUCTION, IT HAS BEEN DECIDED BY THE BOARD THAT DEPARTMENTAL APPEALS MAY BE FILED ON MERITS BEFORE APPELLATE TRIBUNAL AND HIGH COURTS AND SLP ACIT, 5(1), INDORE VS. DR. SHRI RAJENDRA KUMAR SODA NI I.T.A.NO. 177/IND/2015 A.Y. 2011-12 AND C.O. NO.29/IND/2015 DR. SHRI RAJENDRA KUMAR SODNAI VS. ACIT, 5(1), INDORE A.Y. 2011-12 3 3 BEFORE THE SUPREME COURT KEEPING IN VIEW THE MONETA RY LIMITS AND CONDITIONS SPECIFIED BELOW. 3. HENCEFORTH, APPEALS/ SLPS SHALL NOT BE FILED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS GIVEN HEREUNDER: S.NO. APPEALS IN INCOME-TAX MATTERS MONETARY LIMIT (IN RS) 1 BEFORE APPELLATE TRIBUNAL 10,00,000/- 2 BEFORE HIGH COURT 20,00,000/ - 3 BEFORE SUPREME COURT 25,00,000/- IT IS CLARIFIED THAT AN APPEAL SHOULD NOT BE FILED MERELY BECAUSE THE TAX EFFECT IN A CASE EXCEEDS THE MONETA RY LIMITS PRESCRIBED ABOVE. FILING OF APPEAL IN SUCH CASES IS TO BE DECIDED ON MERITS OF THE CASE. 4. FOR THIS PURPOSE, TAX EFFECT MEANS THE DIFFERE NCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND THE TAX TH AT WOULD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN RED UCED BY THE AMOUNT OF INCOME IN RESPECT OF THE ISSUES AGAIN ST WHICH APPEAL IS INTENDED TO BE FILED (HEREINAFTER REFERRE D TO AS DISPUTED ISSUES). HOWEVER THE TAX WILL NOT INCLUD E ANY INTEREST THEREON, EXCEPT WHERE CHARGEABILITY OF INT EREST ITSELF IS IN DISPUTE. IN CASE THE CHARGEABILITY OF INTERES T IS THE ISSUE UNDER DISPUTE, THE AMOUNT OF INTEREST SHALL BE THE TAX EFFECT. IN CASES WHERE RETURNED LOSS IS REDUCED OR ASSESSED AS INCOME, THE TAX EFFECT WOULD INCLUDE NOTIONAL TAX O N DISPUTED ADDITIONS. IN CASE OF PENALTY ORDERS, THE TAX EFFEC T WILL MEAN QUANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER TO BE APPEALED AGAINST. 5. THE ASSESSING OFFICER SHALL CALCULATE THE TAX EF FECT SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESPECT OF THE DISPUTED ISSUES IN THE CASE OF EVERY ASSESSEE. IF, IN THE CASE OF AN ASSESSEE, THE DISPUTED ISSUES ARISE IN MORE THAN ONE ASSESSMENT YEAR, APPEAL, CAN BE FILED IN RESPECT OF SUCH ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUES EXCEEDS THE MONETARY LIMIT SPEC IFIED IN PARA 3. NO APPEAL SHALL BE FILED IN RESPECT OF AN A SSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN PARA 3. IN OTHER WORDS, HENCEFOR TH, APPEALS CAN BE FILED ONLY WITH REFERENCE TO THE TAX EFFECT IN THE ACIT, 5(1), INDORE VS. DR. SHRI RAJENDRA KUMAR SODA NI I.T.A.NO. 177/IND/2015 A.Y. 2011-12 AND C.O. NO.29/IND/2015 DR. SHRI RAJENDRA KUMAR SODNAI VS. ACIT, 5(1), INDORE A.Y. 2011-12 4 4 RELEVANT ASSESSMENT YEAR. HOWEVER, IN CASE OF A COM POSITE ORDER OF ANY HIGH COURT OR APPELLATE AUTHORITY, WHI CH INVOLVES MORE THAN ONE ASSESSMENT YEAR AND COMMON ISSUES IN MORE THAN ONE ASSESSMENT YEAR, APPEAL SHALL BE FILED IN RESPECT OF ALL SUCH ASSESSMENT YEARS EVEN IF THE TAX EFFECT IS LESS THAN THE PRESCRIBED MONETARY LIMITS IN ANY OF THE YEAR(S ), IF IT IS DECIDED TO FILE APPEAL IN RESPECT OF THE YEAR(S) IN WHICH TAX EFFECT EXCEEDS THE MONETARY LIMIT PRESCRIBED. IN C ASE WHERE A COMPOSITE ORDER/ JUDGEMENT INVOLVES MORE THAN ONE ASSESSEE, EACH ASSESSEE SHALL BE DEALT WITH SEPARAT ELY. 6. IN A CASE WHERE APPEAL BEFORE A TRIBUNAL OR A CO URT IS NOT FILED ONLY ON ACCOUNT OF THE TAX EFFECT BEING LESS THAN THE MONETARY LIMIT SPECIFIED ABOVE, THE COMMISSIONER OF INCOME- TAX SHALL SPECIFICALLY RECORD THAT EVEN THOUGH THE DECISION IS NOT ACCEPTABLE, APPEAL IS NOT BEING FILED ONLY ON T HE CONSIDERATION THAT THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN THIS INSTRUCTION. FURTHER, IN S UCH CASES, THERE WILL BE NO PRESUMPTION THAT THE INCOME-TAX DE PARTMENT HAS ACQUIESCED IN THE DECISION ON THE DISPUTED ISSU ES. THE INCOME-TAX DEPARTMENT SHALL NOT BE PRECLUDED FROM F ILING AN APPEAL AGAINST THE DISPUTED ISSUES IN THE CASE OF T HE SAME ASSESSEE FOR ANY OTHER ASSESSMENT YEAR, OR IN THE C ASE OF ANY OTHER ASSESSEE FOR THE SAME OR ANY OTHER ASSESSMENT YEAR, IF THE TAX EFFECT EXCEEDS THE SPECIFIED MONETARY LIMIT S. 7. IN THE PAST, A NUMBER OF INSTANCES HAVE COME TO THE NOTICE OF THE BOARD, WHEREBY AN ASSESSEE HAS CLAIMED RELIE F FROM THE TRIBUNAL OR THE COURT ONLY ON THE GROUND THAT THE DEPARTMENT HAS IMPLICITLY ACCEPTED THE DECISION OF THE TRIBUNAL OR COURT IN THE CASE OF THE ASSESSEE FOR A NY OTHER ASSESSMENT YEAR OR IN THE CASE OF ANY OTHER ASSESSE E FOR THE SAME OR ANY OTHER ASSESSMENT YEAR, BY NOT FILING AN APPEAL ON THE SAME DISPUTED ISSUES. THE DEPARTMENTAL REPRESENTATIVES/COUNSELS MUST MAKE EVERY EFFORT TO BRING TO THE NOTICE OF THE TRIBUNAL OR THE COURT THAT THE AP PEAL IN SUCH CASES WAS NOT FILED OR NOT ADMITTED ONLY FOR T HE REASON OF THE TAX EFFECT BEING LESS THAN THE SPECIFIED MON ETARY LIMIT AND, THEREFORE, NO INFERENCE SHOULD BE DRAWN THAT T HE DECISIONS RENDERED THEREIN WERE ACCEPTABLE TO THE DEPARTMENT. ACCORDINGLY, THEY SHOULD IMPRESS UPON T HE TRIBUNAL OR THE COURT THAT SUCH CASES DO NOT HAVE A NY PRECEDENT VALUE. AS THE EVIDENCE OF NOT FILING APPE AL DUE TO THIS INSTRUCTION MAY HAVE TO BE PRODUCED IN COURTS, THE JUDICIAL FOLDERS IN THE OFFICE OF CSIT MUST BE MAIN TAINED IN A SYSTEMIC MANNER FOR EASY RETRIEVAL. ACIT, 5(1), INDORE VS. DR. SHRI RAJENDRA KUMAR SODA NI I.T.A.NO. 177/IND/2015 A.Y. 2011-12 AND C.O. NO.29/IND/2015 DR. SHRI RAJENDRA KUMAR SODNAI VS. ACIT, 5(1), INDORE A.Y. 2011-12 5 5 8. ADVERSE JUDGMENTS RELATING TO THE FOLLOWING ISSU ES SHOULD BE CONTESTED ON MERITS NOTWITHSTANDING THAT THE TAX EFFECT ENTAILED IS LESS THAN THE MONETARY LIMITS SPECIFIED IN PARA 3 ABOVE OR THERE IS NO TAX EFFECT: (A) WHERE THE CONSTITUTIONAL VALIDITY OF THE PROV ISIONS OF AN ACT OR RULE ARE UNDER CHALLENGE, OR (B) WHERE BOARDS ORDER, NOTIFICATION, INSTRUCTIO N OR CIRCULAR HAS BEEN HELD TO BE ILLEGAL OR ULTRA VIRES, OR (C) WHERE REVENUE AUDIT OBJECTION IN THE CASE HAS BEEN ACCEPTED BY THE DEPARTMENT, OR (D) WHERE THE ADDITION RELATES TO UNDISCLOSED FOR EIGN ASSETS/ BANK ACCOUNTS. 9. THE MONETARY LIMITS SPECIFIED IN PARA 3 ABOVE SH ALL NOT APPLY TO WRIT MATTERS AND DIRECT TAX MATTERS OTHER THAN INCOME TAX. FILING OF APPEALS IN OTHER DIRECT TAX M ATTERS SHALL CONTINUE TO BE GOVERNED BY RELEVANT PROVISIONS OF S TATUTE & RULES. FURTHER, FILING OF APPEAL IN CASES OF INCOME TAX, WHERE THE TAX EFFECT IS NOT QUANTIFIABLE OR NOT INVOLVED, SUCH AS THE CASE OF REGISTRATION OF TRUSTS OR INSTITUTIONS UNDE R SECTION 12A OF THE IT ACT, 1961, SHALL NOT BE GOVERNED BY T HE LIMITS SPECIFIED IN PARA 3 ABOVE AND DECISION TO FILE APP EAL IN SUCH CASES MAY BE TAKEN ON MERITS OF A PARTICULAR CASE. 10. THIS INSTRUCTION WILL APPLY RETROSPECTIVELY TO PENDING APPEALS AND APPEALS TO BE FILED HENCEFORTH IN HIGH COURTS/ TRIBUNALS. PENDING APPEALS BELOW THE SPECIFIED TAX LIMITS IN PARA 3 ABOVE MAY BE WITHDRAWN/NOT PRESSED. APPEALS BEFORE THE SUPREME COURT WILL BE GOVERNED BY THE INSTRUCTI ONS ON THIS SUBJECT, OPERATIVE AT THE TIME WHEN SUCH APPEA L WAS FILED. 11. THIS ISSUES UNDER SECTION 268A (1) OF THE INCOM E-TAX ACT 1961. 3. IN VIEW OF THE ABOVE CIRCULAR, SINCE THE TAX EFF ECT INVOLVED IN THIS APPEAL IS BELOW THE PRESCRIBED MONETARY LIM IT FOR FILING OF APPEALS BEFORE THE ITAT, THEREFORE, THE PRESENT APPEAL DESERVES TO BE DISMISSED IN LIMINE BEING NOT MAINTAINABLE IN VIEW OF ABOVE CIRCULAR NO. 21/20145 DATED 10.12.201 5. ACIT, 5(1), INDORE VS. DR. SHRI RAJENDRA KUMAR SODA NI I.T.A.NO. 177/IND/2015 A.Y. 2011-12 AND C.O. NO.29/IND/2015 DR. SHRI RAJENDRA KUMAR SODNAI VS. ACIT, 5(1), INDORE A.Y. 2011-12 6 6 4. WE FURTHER FIND THAT HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS M/S. P. S. JAIN & CO. IN ITA NO.179/1991 DATED 02.08.2010 HAS HELD AS UNDER: THIS COURT CAN VERY WELL TAKE JUDICIAL NOTICE OF T HE FACT THAT BY PASSAGE OF TIME MONEY VALUE HAS GONE DOWN, THE COST OF LITIGATION EXPENSES HAS GONE UP, THE ASSESSEES ON THE FILE OF THE DEPARTMENTS HAVE BEEN INCREASED CONSEQUENTLY, THE BURDEN ON THE DEPARTMEN T HAS ALSO INCREASED TO A TREMENDOUS EXTENT. THE CORRIDORS OF THE SUPERIOR COURTS ARE CHOCKED WITH H UGE PENDENCY OF CASES. IN THIS VIEW OF THE MATTER, THE BOARD HAS RIGHTLY TAKEN A DECISION NOT TO FILE REFE RENCES IF THE TAX EFFECT LESS THAN RS. 2 LAKHS. THE SAME POLICY FOR OLD MATTERS NEEDS TO BE ADOPTED BY THE DEPARTME NT. IN OUR VIEW, THE BOARDS CIRCULAR DATED MARCH 27, 2 000 IS VERY MUCH APPLICABLE EVEN TO THE OLD REFERENCES WHICH ARE STILL UNDECIDED. THE DEPARTMENT IS NOT JUSTIFI ED IN PROCEEDING WITH THE OLD REFERENCES WHEREIN THE TAX IMPACT IS MINIMAL. THUS, THERE IS NO JUSTIFICATION TO PROCEEDS WITH DECADES OLD REFERENCES HAVING NEGLIGI BLE TAX EFFECT. SIMILARLY, HONBLE GUJARAT HIGH COURT IN THE CASE O F CIT V. SURESHCHANDRA DURGAPRASAD KHATOD (HUF) (2012) 253 CTR 492 (GUJ) HAS SPECIFICALLY CONSIDERE D INSTRUCTION NO. 3/2011 AND HELD THAT THE SAME WOULD APPLY TO PENDING CASES AS WELL EVEN THOUGH THERE WA S ACIT, 5(1), INDORE VS. DR. SHRI RAJENDRA KUMAR SODA NI I.T.A.NO. 177/IND/2015 A.Y. 2011-12 AND C.O. NO.29/IND/2015 DR. SHRI RAJENDRA KUMAR SODNAI VS. ACIT, 5(1), INDORE A.Y. 2011-12 7 7 A SPECIFIC CONDITION IN THAT INSTRUCTION ALSO THAT THE SAME WOULD APPLY TO APPEALS FILED ON OR AFTER FEBRUARY, 2011. HONBLE HIGH COURT HAS CONSIDERED THIS ISSUE AS UNDER:- 6. THE QUESTION ABOUT APPLICABILITY OF INSTRUCTION NO.3 OF 2011 HAD BEEN CONSIDERED AND DECIDED BY THE AURANGABAD BENCH OF THE BOMBAY HIGH COURT IN TAX APPEAL NO. 78 OF 2007, THE COMMISSIONER OF INCOME TAX V. SMT. VIJAYA V. KAVEKAR DECIDED ON 29.7.2011. THE DIVISION BENCH, AFTER CONSIDERING EARLIER INSTRUCTIONS AND VARIOUS DECISIONS OF THE COURTS ON INSTRUCTIONS, RELYING ON THE DECISION IN COMMISSION ER OF INCOME TAX VS. MADHUKAR K. INAMDAR (HUF) REPORTED I N (2010) 229 CTR (BOM) 77, HAS HELD IN PARAGRAPHS 9, 10, 11, 14 AND 17 AS UNDER: '9. AS STATED EARLIER, THE INCOME TAX ACT WAS AMEND ED AND SECTION 268A HAS BEEN INTRODUCED ON THE STATUTE BOOK WITH RETROSPECTIVE EFFECT. SECTION 268A CARVES OUT AN EXCEPTION FOR FILING OF APPEALS AND REFERENCES U NDER SECTION 260 A OF THE ACT. THE LEGISLATURE HAS PRESC RIBED THAT THE CBDT IS EMPOWERED TO ISSUE CIRCULARS AND INSTRUCTIONS FROM TIME TO TIME, WITH REGARD TO FILI NG OF APPEALS DEPENDING ON THE TAX EFFECT INVOLVED. THEREAFTER, IN 2008, CBDT INSTRUCTION NO. 5 OF 2008 DATED 15TH MAY, 2008 WAS ISSUED. THIS COURT IN THE CASE OF 'COMMISSIONER OF INCOME TAX V/S MADHUKAR K. INAMDAR (HUF) REPORTED IN '(2010) 229 CTR (BOM) 77, INTERPRETED THE AFORESAID CIRCULAR. THE CIRCULAR WA S ISSUED IN SUPERSESSION OF ALL EARLIER INSTRUCTIONS ISSUED ACIT, 5(1), INDORE VS. DR. SHRI RAJENDRA KUMAR SODA NI I.T.A.NO. 177/IND/2015 A.Y. 2011-12 AND C.O. NO.29/IND/2015 DR. SHRI RAJENDRA KUMAR SODNAI VS. ACIT, 5(1), INDORE A.Y. 2011-12 8 8 BY THE BOARD. THE MONETARY LIMIT WAS INCREASED AND APPEALS WERE TO BE FILED UNDER SECTION 260A, THEREA FTER, ONLY IN CASES WHERE THE TAX EFFECT EXCEEDED RS. 4 L ACS. PARAGRAPH 11 OF THAT INSTRUCTION STIPULATED THAT IT WAS APPLICABLE TO APPEALS FILED ON OR AFTER 15TH MAY, 2 008. IT WAS FURTHER PROVIDED THAT IN CASES, WHERE APPEAL S WERE FILED BEFORE 15TH MAY, 2008, THEY WOULD BE GOVERNED BY THE INSTRUCTIONS ON THIS SUBJECT WHICH WERE OPERATIVE AT THE TIME WHEN SUCH APPEALS WERE FILED. THE INSTRUCTION WAS ISSUED UNDER SECTION 268A(1) OF THE ACT. THE ARGUMENT OF THE LEARNED COUNSEL FOR THE REVENUE IN THAT CASE WAS, THAT THE INSTRUCTION ISSUED ON 15TH MAY, 2008 DID NOT PRECLUDE THE DEPARTMENT FROM CONTINUIN G WITH THE APPEALS AND/OR PETITIONS FILED PRIOR TO 15 TH MAY, 2008, IF THEY INVOLVED A SUBSTANTIAL QUESTION OF LAW OF A RECURRING NATURE, NOTWITHSTANDING THE FACT THAT THE TOTAL CUMULATIVE TAX EFFECT INVOLVED IN THE APP EALS WAS LESS THAN RS. 4 LACS. IT WAS SUBMITTED, SUCH APPEALS WHICH WERE FILED PRIOR TO THE ISSUANCE OF INSTRUCTION AND WHERE SUBSTANTIAL QUESTIONS OF LAW WERE RAISED, WERE REQUIRED TO BE DECIDED ON MERITS. THE COURT, WHILE CONSIDERING THE ISSUE OBSERVED THAT PARAGRAPH 5 OF THE CIRCULAR MADE IT CLEAR THAT NO APPEALS WOULD BE FILED IN THE CASES INVOLVING TAX E FFECT LESS THAN RS. 4 LACS NOTWITHSTANDING THE ISSUE BEIN G OF RECURRING NATURE. RELYING ON THE JUDGEMENT IN CIT V /S POLYCOTT CORPORATION, THE COURT OBSERVED AS FOLLOWS : '6 THE AFORESAID JUDICIAL VERDICT MAKES IT CLEAR THAT THE CIRCULAR DT. 15TH MAY, 2008 IN GENERAL AND PARA (5) THEREOF IN PARTICULAR LAY DOWN THAT EVEN IF THE SAM E ISSUE, IN RESPECT OF SAME ASSESSEE, FOR OTHER ASSES SMENT YEARS IS INVOLVED, EVEN THEN THE DEPARTMENT SHOULD NOT FILE APPEAL, IF THE TAX EFFECT IS LESS THAN RS. 4 L AKHS. IN ACIT, 5(1), INDORE VS. DR. SHRI RAJENDRA KUMAR SODA NI I.T.A.NO. 177/IND/2015 A.Y. 2011-12 AND C.O. NO.29/IND/2015 DR. SHRI RAJENDRA KUMAR SODNAI VS. ACIT, 5(1), INDORE A.Y. 2011-12 9 9 OTHER WORDS, EVEN IF THE QUESTION OF LAW IS OF RECU RRING NATURE EVEN THEN, THE REVENUE IS NOT EXPECTED TO FI LE APPEALS IN SUCH CASES, IF THE TAX IMPACT IS LESS TH AN THE MONETARY LIMIT FIXED BY THE CBDT.' 7. ONE FAILS TO UNDERSTAND HOW THE REVENUE, ON THE FACE OF THE ABOVE CLEAR INSTRUCTIONS OF THE CBDT, CAN CO NTEND THAT THE CIRCULAR DT. 15TH MAY, 2008 ISSUED BY THE CBDT IS APPLICABLE TO THE CASES FILED AFTER 15TH MAY, 20 08 AND IN COMPLIANCE THEREOF, THEY DO NOT FILE APPEALS, IF THE TAX EFFECT IS LESS THAN RS. 4 LAKHS; BUT THE SAID CIRCU LAR IS NOT APPLICABLE TO THE CASES FILED PRIOR TO 15TH MAY , 2008 I.E. TO THE OLD PENDING APPEALS, EVEN IF THE TAX EF FECT IS LESS THAN RS. 4 LAKHS. IN OUR VIEW, THERE IS NO LOG IC BEHIND THIS BELIEF ENTERTAINED BY THE REVENUE.' THE COURT HAS FURTHER HELD THAT THE PREVAILING INSTRUCTIONS FIXING THE MONETARY LIMIT FOR THE TAX EFFECT WOULD HOLD GOOD EVEN FOR PENDING CASES. ACCORDINGLY , THE COURT DISMISSED ALL THE APPEALS HAVING A TAX EF FECT OF LESS THAN RS. 4 LACS. 10. THE NEW CBDT INSTRUCTIONS HAVE BEEN ISSUED ON 9 TH FEBRUARY, 2011, BEING INSTRUCTION NO. 3 OF 2011. TH E MONETARY LIMIT HAS BEEN RAISED AGAIN AND CLAUSE 3 O F THE INSTRUCTIONS PROVIDES THAT APPEALS SHALL NOT BE FILED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS PRESCRIBED, HENCEFORTH. THE MONETAR Y LIMITS PRESCRIBED FOR FILING AN APPEAL UNDER SECTIO N 260A BEFORE THE HIGH COURT HAS BEEN RAISED TO RS. 10 LAC S. THIS INSTRUCTION IS IDENTICAL TO THE CBDT INSTRUCTI ON NO. 5 OF 2008. CLAUSE 10 OF THIS CIRCULAR INDICATES THAT MONETARY LIMITS WOULD NOT APPLY TO WRIT MATTERS AND DIRECT TAX MATTERS OTHER THAN INCOME TAX. IT FURTHE R ACIT, 5(1), INDORE VS. DR. SHRI RAJENDRA KUMAR SODA NI I.T.A.NO. 177/IND/2015 A.Y. 2011-12 AND C.O. NO.29/IND/2015 DR. SHRI RAJENDRA KUMAR SODNAI VS. ACIT, 5(1), INDORE A.Y. 2011-12 10 10 PROVIDES THAT WHERE THE TAX EFFECT IS NOT QUANTIFIA BLE, THE DEPARTMENT SHOULD TAKE A DECISION TO FILE APPEALS O N MERITS OF EACH CASE. CLAUSE 11, AGAIN PROVIDES THAT THE INSTRUCTION WOULD APPLY TO APPEALS FILED ON OR AFTE R ....2011 AND APPEALS FILED BEFORE ...... 2011 WOULD BE GOVERNED BY THE INSTRUCTIONS ON THIS SUBJECT, OPERA TIVE AT THE TIME WHEN SUCH APPEALS WERE FILED. 11. IN OUR OPINION, WHEN A SIMILAR CLAUSE HAS BEEN INTERPRETED BY THE DIVISION BENCH OF THIS COURT IN CIT VS. MADHUKARINAMDAR (SUPRA), THE SAME PRINCIPLES MUST APPLY IN THE PRESENT CASES ALSO, AS WE HAVE FOUND T HAT THE INSTRUCTIONS OF 15TH MAY, 2008 IS PARA- MATERIA L WITH THE INSTRUCTION OF 9TH FEBRUARY, 2011. 14. SIMILARLY, THE DELHI HIGH COURT IN THE CASE OF 'COMMISSIONER OF INCOME TAX V/S DELHI RACE CLUB LTD .', DECIDED ON MARCH 03, 2011, BY RELYING ON ITS EARLIE R JUDGEMENT 'COMMISSIONER INCOME TAX DELHI-III V/S M/ S P.S. JAIN AND CO. DECIDED ON 2ND AUGUST, 2010 HAS HELD THAT THE CBDT CIRCULAR RAISING THE MONETARY LI MIT OF THE TAX EFFECT TO RS. 10 LACS WOULD BE APPLICABLE T O PENDING CASES ALSO. 17. IT IS TRUE THAT THIS JUDGEMENT IN CHHAJER'S CAS E (SUPRA) WAS NOT BROUGHT TO THE NOTICE OF THE DIVISI ON BENCH, WHILE DECIDING EITHER MADHUKAR'S CASE (SUPRA ) OR THE CASE OF POLYCOT CORPORATION (SUPRA). HOWEVER, T HE INSTRUCTION OF 2005 WHICH WAS CONSIDERED IN CHHAJER 'S CASE HAS ALSO BEEN INTERPRETED IN POLYCOT CORPORATI ON (SUPRA). THE CONSISTENT VIEW OF THE COURT HAS BEEN THAT THE CBDT INSTRUCTION WOULD APPLY TO PENDING CASES A S ACIT, 5(1), INDORE VS. DR. SHRI RAJENDRA KUMAR SODA NI I.T.A.NO. 177/IND/2015 A.Y. 2011-12 AND C.O. NO.29/IND/2015 DR. SHRI RAJENDRA KUMAR SODNAI VS. ACIT, 5(1), INDORE A.Y. 2011-12 11 11 WELL. THE MAIN OBJECTIVE OF SUCH INSTRUCTIONS IS TO REDUCE THE PENDING LITIGATION WHERE THE TAX EFFECT IS CONSIDERABLY SMALL. THEREFORE, IN OUR OPINION, THE TAX APPEALS ARE REQUIRED TO BE DISMISSED, AS THEY ARE N OT MAINTAINABLE IN VIEW OF THE PROVISIONS OF SECTION 2 68A OF THE INCOME TAX, AND THE CBDT INSTRUCTION NO. 3 OF 2011.' 7. THE SAME VIEW HAS BEEN TAKEN BY THE KARNATAKA HIGH COURT IN ITA NO.3191 OF 2005 IN THE COMMISSION ER OF INCOME- TAX VS. M/S. RANKA & RANKA DECIDED ON 2.11.2011, WHEREIN THE DIVISION BENCH HAS CONSIDERE D INSTRUCTION NO.3 AND THE NATIONAL LITIGATION, POLIC Y, HAD HELD AS UNDER: '(I) INSTRUCTION NO.3/11 IS ALSO APPLICABLE TO THE PENDING APPEALS. (II) AS THE TAX EFFECT IN THE INSTANT CASE IS LESS THAN RS.10 LAKHS, THE APPEAL STANDS DISMISSED ON THE GROUND OF MONETARY LIMIT, WITHOUT EXPRESSING ANY OPINION ON T HE MERITS OF THE CLAIM, MAKING IT CLEAR THAT THE DEPAR TMENT IS AT LIBERTY TO PROCEED AGAINST THE ASSESSEE IN FU TURE, IF THERE ANY AMOUNT DUE FROM THE ASSESSEE, ON SIMILAR ISSUE AND IF IT IS ABOVE THE MONETARY LIMIT PRESCRI BED.' ACIT, 5(1), INDORE VS. DR. SHRI RAJENDRA KUMAR SODA NI I.T.A.NO. 177/IND/2015 A.Y. 2011-12 AND C.O. NO.29/IND/2015 DR. SHRI RAJENDRA KUMAR SODNAI VS. ACIT, 5(1), INDORE A.Y. 2011-12 12 12 5. WE ALSO FIND FROM THE ABOVE CASE LAW OF HONBLE GUJARAT HIGH COURT IN THE CASE OF SURESH CHANDRA DURGAPRASAD KHATOD (HUF) ( SUPRA ) THAT IN THE SIMILAR SITUATION, EXACTLY IDENTICAL INSTRUCTIONS WERE APPL IED TO THE APPEALS FILED RETROSPECTIVELY. HONBLE GUJARAT HIGH COURT HAS DISCUSSED THAT ALMOST ALL HIGH COURTS ARE OF THE UN ANIMOUS VIEW, CONSIDERING THE MAIN OBJECTIVE OF SUCH INSTRU CTIONS THAT TO REDUCE THE PENDING LITIGATION, WHERE THE TAX EFF ECT IS CONSIDERABLE LOW OR SMALL, THE APPEAL IS NOT MAINTA INABLE. THE RECENT INSTRUCTION REVISING THE MONETARY LIMIT TO R S. 10 LAKHS FOR FILING APPEAL BEFORE ITAT ON INCOME TAX MATTERS , AS ISSUED VIDE THE ABOVE CIRCULAR WILL APPLY TO PENDING APPEA LS ALSO FOR THE REASON THAT THE SAME IS EXACTLY IDENTICAL TO EA RLIER INSTRUCTIONS. 6. IN VIEW OF THE ABOVE DISCUSSION AND THE LATEST C IRCULAR ISSUED BY THE CBDT, AS REPRODUCED ABOVE, SINCE THE TAX EFFECT INVOLVED IN THE PRESENT APPEAL IS BELOW THE MONETAR Y LIMIT, THEREFORE, WE DISMISS THIS DEPARTMENTAL APPEAL IN LIMINE BEING NOT MAINTAINABLE. ACIT, 5(1), INDORE VS. DR. SHRI RAJENDRA KUMAR SODA NI I.T.A.NO. 177/IND/2015 A.Y. 2011-12 AND C.O. NO.29/IND/2015 DR. SHRI RAJENDRA KUMAR SODNAI VS. ACIT, 5(1), INDORE A.Y. 2011-12 13 13 7. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED, BEING NOT MAINTAINABLE. C.O. NO. 29/IND/2015: 8. SINCE WE HAVE DISMISSED THE APPEAL OF THE REVENU E, THE CROSS OBJECTION FILED BY THE ASSESSEE HAS BECOME IN FRUCTUOUS AND HENCE THE SAME IS DISMISSED. 9. CONSEQUENTLY, THE APPEAL OF THE REVENUE AS WELL AS CROSS OBJECTION BOTH ARE DISMISSED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 14 TH MARCH, 2016. SD/- (B.C.MEENA) ACCOUNTANT MEMBER SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 14 TH MARCH, 2016. CPU* 14.3