M/s. GEET CONTRUCTIONS, Bhopal V. The ACIT 3(1), Bhopal

CO 68/IND/2014

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 1223 (ITAT-INDORE)
• Duration Of Justice: 11 month(s) 25 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 20-08-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 18-08-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 25-08-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N D PATWA
• Assessee Lawyers: R A VERMA
• Keywords: Audit objection; Retrospective amendment; Question of law; Tax effect
• Section: 260A

Judgement Text

ACIT VS. GEET CONSTRUCTION ITA NO.507/IND/2014 1 IN THE INCOME TAX APPELLATE TRIBUNA L INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER AND SHRI B.C. MEENA, HONBLE ACCOUNTANT MEMBER ITA NO. 507/IND/2014 A.Y. 2005-06 ASSTT.COMMR. OF INCOME TAX 3(1) BHOPAL ::: APPELLANT VS M/S GEET CONSTRUCTION BHOPAL ::: RESPONDENT CO NO. 68/IND/2014 ARISING OUT OF ITA NO. 507/IND/2014 M/S GEET CONSTRUCTION BHOPAL ::: OBJECTOR VS ASSTT.COMMR. OF INCOME TAX 3(1) BHOPAL ::: RESPONDENT ACIT VS. GEET CONSTRUCTION ITA NO.507/IND/2014 2 DEPTT. BY SHRI R.A. VERMA RESPONDENT BY SHRI ASHISH GOYAL AND SHRI N.D. PATWA DATE OF HEARING 18.8.2015 DATE OF PRONOUNCEMENT 2 0 .8.2015 O R D E R PER SHRI B.C. MEENA, AM THE APPEAL BY THE REVENUE AND THE CROSS OBJECTION BY THE ASSESSEE EMANATE FROM THE ORDER OF THE LEARNED CIT(A)-II, BHOPAL, DATED 19.5.2014. 2. AT THE OUTSET IT WAS POINTED OUT BY THE BENCH TO THE LEARNED DR THAT SINCE THE TAX EFFECT IN THIS APPEALS I S BELOW THE PRESCRIBED MONETARY LIMIT FOR FILING OF APPEALS BE FORE THE ITAT, THEREFORE, THE PRESENT APPEAL DESERVES TO B E DISMISSED IN VIEW OF INSTRUCTION NO. 5/2014 ISSUED BY CBDT ON 10.7.2014 REVISING THE MONETARY LIMIT FOR FI LING OF APPEAL BEFORE ITAT FIXING THE TAX EFFECT LIMIT OF RS. 4 LACS. THE APPEAL IS NOT MAINTAINABLE AND LIABLE TO BE DISMISSED IN LIMINE . THE ONLY ISSUE NOW REMAINS BEFORE US IS WHETHER ACIT VS. GEET CONSTRUCTION ITA NO.507/IND/2014 3 THIS APPEAL OF THE REVENUE WHICH IS BELOW THE PRESCRI BED LIMIT OF TAX EFFECT IN VIEW OF THE BOARD INSTRUCTION NO. 5/2014 ISSUED ON 10.7.2014 REVISING THE MONETARY LIM IT FOR FILING OF APPEAL BY THE DEPARTMENT BEFORE ITAT IS MAINTAINABLE OR NOT. THE LD. DR DREW OUR ATTENTION TO PARA 11 OF THE INSTRUCTIONS AND ARGUED THAT THIS WILL APPLY TO THE APPEALS FILED ON/AFTER 10.7.2014 AND NOT TO THE APPEAL FI LED PRIOR TO 10.7.2014. 3. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. AT THE OUTSET, IT IS SEEN 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 ACIT VS. GEET CONSTRUCTION ITA NO.507/IND/2014 4 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 JUSTIFIED IN PROCEEDING WITH THE OLD REFERENCES WHE REIN THE TAX IMPACT IS MINIMAL. THUS, THERE IS NO JUSTIFICATION TO PROCEEDS WITH DECADES OLD REFERENC ES HAVING NEGLIGIBLE TAX EFFECT. SIMILARLY, HONBLE GUJARAT HIGH COURT IN THE CASE OF CI T V. SURESHCHANDRADURGAPRASADKHATOD (HUF) (2012) 253 CTR 492 (GUJ) HAS SPECIFICALLY CONSIDERED INSTRUCTION NO . 3/2011 AND HELD THAT THE SAME WOULD APPLY TO PENDING CASES AS WELL EVEN THOUGH THERE WAS A SPECIFIC CONDITIO N IN THAT INSTRUCTION ALSO THAT THE SAME WOULD APPLY TO APPE ALS 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 ACIT VS. GEET CONSTRUCTION ITA NO.507/IND/2014 5 AURANGABAD BENCH OF THE BOMBAY HIGH COURT IN TAX APPEAL NO. 78 OF 2007, THE COMMISSIONER OF INCOME T AX V. SMT. VIJAYA V. KAVEKAR DECIDED ON 29.7.2011. THE DIVISION BENCH, AFTER CONSIDERING EARLIER INSTRUCTI ONS AND VARIOUS DECISIONS OF THE COURTS ON INSTRUCTIONS, RE LYING ON THE DECISION IN COMMISSIONER OF INCOME TAX VS. MADHUKAR K. INAMDAR (HUF) REPORTED IN (2010) 229 CT R (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 UNDE R 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 O F 'COMMISSIONER OF INCOME TAX V/S MADHUKAR K. INAMDAR (HUF) REPORTED IN '(2010) 229 CTR (BOM) 77, INTERPR ETED THE AFORESAID CIRCULAR. THE CIRCULAR WAS ISSUED IN SUPERSESSION OF ALL EARLIER INSTRUCTIONS ISSUED BY THE BOARD. THE MONETARY LIMIT WAS INCREASED AND APPEALS WERE TO BE FILED UNDER SECTION 260A, THEREAFTER, ON LY IN CASES WHERE THE TAX EFFECT EXCEEDED RS. 4 LACS. PARAGRAPH 11 OF THAT INSTRUCTION STIPULATED THAT IT WAS ACIT VS. GEET CONSTRUCTION ITA NO.507/IND/2014 6 APPLICABLE TO APPEALS FILED ON OR AFTER 15TH MAY, 2 008. IT WAS FURTHER PROVIDED THAT IN CASES, WHERE APPEALS W ERE FILED BEFORE 15TH MAY, 2008, THEY WOULD BE GOVERNED BY THE INSTRUCTIONS ON THIS SUBJECT WHICH WERE OPERATI VE AT THE TIME WHEN SUCH APPEALS WERE FILED. THE INSTRUCT ION 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 CONTINUING WIT H THE APPEALS AND/OR PETITIONS FILED PRIOR TO 15TH MAY, 2 008, IF THEY INVOLVED A SUBSTANTIAL QUESTION OF LAW OF A RE CURRING NATURE, NOTWITHSTANDING THE FACT THAT THE TOTAL CUM ULATIVE TAX EFFECT INVOLVED IN THE APPEALS WAS LESS THAN RS . 4 LACS. IT WAS SUBMITTED, SUCH APPEALS WHICH WERE FIL ED PRIOR TO THE ISSUANCE OF INSTRUCTION AND WHERE SUBS TANTIAL QUESTIONS OF LAW WERE RAISED, WERE REQUIRED TO BE D ECIDED ON MERITS. THE COURT, WHILE CONSIDERING THE ISSUE OBSERVED THAT PARAGRAPH 5 OF THE CIRCULAR MADE IT C LEAR THAT NO APPEALS WOULD BE FILED IN THE CASES INVOLVI NG TAX EFFECT LESS THAN RS. 4 LACS NOTWITHSTANDING THE ISS UE BEING OF RECURRING NATURE. RELYING ON THE JUDGEMENT IN CIT V/S POLYCOTT CORPORATION, THE COURT OBSERVED AS FOL LOWS: '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 ASSESSMENT Y EARS IS INVOLVED, EVEN THEN THE DEPARTMENT SHOULD NOT FI LE APPEAL, IF THE TAX EFFECT IS LESS THAN RS. 4 LAKHS. IN OTHER ACIT VS. GEET CONSTRUCTION ITA NO.507/IND/2014 7 WORDS, EVEN IF THE QUESTION OF LAW IS OF RECURRING NATURE EVEN THEN, THE REVENUE IS NOT EXPECTED TO FILE APPE ALS IN SUCH CASES, IF THE TAX IMPACT IS LESS THAN THE MONE TARY 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 CONTE ND THAT THE CIRCULAR DT. 15TH MAY, 2008 ISSUED BY THE CBDT IS APPLICABLE TO THE CASES FILED AFTER 15TH MAY, 2008 AND IN COMPLIANCE THEREOF, THEY DO NOT FILE APPEALS, IF TH E TAX EFFECT IS LESS THAN RS. 4 LAKHS; BUT THE SAID CIRCU LAR IS NOT APPLICABLE TO THE CASES FILED PRIOR TO 15TH MAY, 20 08 I.E. TO THE OLD PENDING APPEALS, EVEN IF THE TAX EFFECT IS LESS THAN RS. 4 LAKHS. IN OUR VIEW, THERE IS NO LOGIC BEHIND THIS BELIEF ENTERTAINED BY THE REVENUE.' THE COURT HAS FURTHER HELD THAT THE PREVAILING INST RUCTIONS FIXING THE MONETARY LIMIT FOR THE TAX EFFECT WOULD HOLD GOOD EVEN FOR PENDING CASES. ACCORDINGLY, THE COURT DISM ISSED ALL THE APPEALS HAVING A TAX EFFECT 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 FIL ED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONE TARY LIMITS PRESCRIBED, HENCEFORTH. THE MONETARY LIMITS PRESCRIBED FOR FILING AN APPEAL UNDER SECTION 260A BEFORE THE HIGH COURT HAS BEEN RAISED TO RS. 10 LACS. THIS ACIT VS. GEET CONSTRUCTION ITA NO.507/IND/2014 8 INSTRUCTION IS IDENTICAL TO THE CBDT INSTRUCTION NO . 5 OF 2008. CLAUSE 10 OF THIS CIRCULAR INDICATES THAT MON ETARY LIMITS WOULD NOT APPLY TO WRIT MATTERS AND DIRECT T AX MATTERS OTHER THAN INCOME TAX. IT FURTHER PROVIDES THAT WHERE THE TAX EFFECT IS NOT QUANTIFIABLE, THE DEPAR TMENT SHOULD TAKE A DECISION TO FILE APPEALS ON MERITS OF EACH CASE. CLAUSE 11, AGAIN PROVIDES THAT THE INSTRUCTIO N WOULD APPLY TO APPEALS FILED ON OR AFTER ....2011 AND APP EALS FILED BEFORE ...... 2011 WOULD BE GOVERNED BY THE INSTRUCTIONS ON THIS SUBJECT, OPERATIVE 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 H ELD THAT THE CBDT CIRCULAR RAISING THE MONETARY LIMIT O F THE TAX EFFECT TO RS. 10 LACS WOULD BE APPLICABLE TO PE NDING CASES ALSO. ACIT VS. GEET CONSTRUCTION ITA NO.507/IND/2014 9 17. IT IS TRUE THAT THIS JUDGEMENT IN CHHAJER'S CAS E (SUPRA) WAS NOT BROUGHT TO THE NOTICE OF THE DIVISION BENCH , WHILE DECIDING EITHER MADHUKAR'S CASE (SUPRA) OR THE CASE OF POLYCOT CORPORATION (SUPRA). HOWEVER, THE INSTRUCTI ON OF 2005 WHICH WAS CONSIDERED IN CHHAJER'S CASE HAS ALS O BEEN INTERPRETED IN POLYCOT CORPORATION (SUPRA). TH E CONSISTENT VIEW OF THE COURT HAS BEEN THAT THE CBDT INSTRUCTION WOULD APPLY TO PENDING CASES AS WELL. T HE MAIN OBJECTIVE OF SUCH INSTRUCTIONS IS TO REDUCE TH E PENDING LITIGATION WHERE THE TAX EFFECT IS CONSIDER ABLY SMALL. THEREFORE, IN OUR OPINION, THE TAX APPEALS A RE REQUIRED TO BE DISMISSED, AS THEY ARE NOT MAINTAINA BLE IN VIEW OF THE PROVISIONS OF SECTION 268A OF THE INCOM E TAX, AND THE CBDT INSTRUCTION NO. 3 OF 2011.' 7. THE SAME VIEW HAS BEEN TAKEN BY THE KARNATAKA HI GH COURT IN ITA NO.3191 OF 2005 IN THE COMMISSIONER 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 ACIT VS. GEET CONSTRUCTION ITA NO.507/IND/2014 10 AT LIBERTY TO PROCEED AGAINST THE ASSESSEE IN FUTUR E, IF THERE ANY AMOUNT DUE FROM THE ASSESSEE, ON SIMILAR ISSUE AND IF IT IS ABOVE THE MONETARY LIMIT PRESCRIBED.' 4. WE FIND FROM THE ABOVE CASE LAW OF HONBLE GUJARAT HIGH COURT IN THE CASE OF SURESH CHANDRA DURGAPRASADKHATOD (HUF) ( SUPRA ) THAT IN THE SIMILAR SITUATION AND EXACTLY IDENTICAL INSTRUCTIONS WERE APPLIE D TO THE APPEALS FILED RETROSPECTIVELY. HONBLE GUJARAT HIGH COURT HAS DISCUSSED THAT ALMOST ALL HIGH COURTS ARE OF T HE UNANIMOUS VIEW, CONSIDERING THE MAIN OBJECTIVE OF SUC H INSTRUCTIONS THAT TO REDUCE THE PENDING LITIGATION, W HERE THE TAX EFFECT IS CONSIDERABLE LOW OR SMALL, THE APPEAL IS NOT MAINTAINABLE. THE RECENT INSTRUCTION REVISING THE MON ETARY LIMIT TO RS. 4 LAKH FOR FILING APPEAL BEFORE ITAT ON INCOME TAX MATTERS, AS ISSUED VIDE INSTRUCTION NO.5/2014 FNO . 279/MISC.142/2007-ITJ(PT) DATED 10 TH JULY, 2014 WILL APPLY TO PENDING APPEALS ALSO FOR THE REASON THAT THE SAME IS EXACTLY IDENTICAL TO EARLIER INSTRUCTIONS. THE RELEVAN T CIRCULAR ISSUED BY CBDT READS AS UNDER: REFERENCE IS INVITED TO BOARDS INSTRUCTION NO 3/2011 DATED 09/02/2011 WHEREIN MONETARY LIMITS AND OTHER CONDITIONS FOR FILING ACIT VS. GEET CONSTRUCTION ITA NO.507/IND/2014 11 DEPARTMENTAL APPEALS (IN INCOME-TAX MATTERS) BEFORE APPELLATE TRIBUNAL, HIGH COURTS AND 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, HIGH COURTS AND SUPREME COURT KEEPING IN VIEW THE MONETARY LIMITS AND CONDITIONS SPECIFIED BELOW. 3. HENCEFORTH APPEALS 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 LIMITS (IN RS) 1 BEFORE APPELLATE TRIBUNAL 4,00,000/- 2 U/S 260A BEFORE HIGH COURT 10,00,000/- 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 C ASES IS TO BE DECIDED ON MERITS OF THE CASE. ACIT VS. GEET CONSTRUCTION ITA NO.507/IND/2014 12 4. FOR THIS PURPOSE, TAX EFFECT MEANS THE DIFFERE NCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND TH E TAX THAT WOULD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESP ECT OF THE ISSUES AGAINST WHICH APPEAL IS INTENDED TO B E FILED (HEREINAFTER REFERRED TO AS DISPUTED ISSUES ). HOWEVER THE TAX WILL NOT INCLUDE ANY INTEREST THERE ON, EXCEPT WHERE CHARGEABILITY OF INTEREST ITSELF IS IN DISPUTE. IN CASE THE CHARGEABILITY OF INTEREST IS THE ISSUE UNDER DISPUTE, THE AMOUNT OF INTEREST SHALL BE THE TAX EF FECT. 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 EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDU CED 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 M ORE THAN ONE ASSESSMENT YEAR, APPEAL, CAN BE FILED IN RESPECT OF SUCH ASSESSMENT YEAR OR YEARS IN WHICH T HE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUES EXCEED S THE MONETARY LIMIT SPECIFIED IN PARA 3. NO APPEAL SHALL BE FILED IN RESPECT OF AN ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPEC IFIED IN PARA 3. IN OTHER WORDS, HENCEFORTH, APPEALS CAN BE FILED ONLY WITH REFERENCE TO THE TAX EFFECT IN THE RELEVA NT ACIT VS. GEET CONSTRUCTION ITA NO.507/IND/2014 13 ASSESSMENT YEAR. HOWEVER, IN CASE OF A COMPOSITE OR DER OF ANY HIGH COURT OR APPELLATE AUTHORITY, WHICH INV OLVES MORE THAN ONE ASSESSMENT YEAR AND COMMON ISSUES IN MORE THAN ONE ASSESSMENT YEAR, APPEAL SHALL BE FILE D IN RESPECT OF ALL SUCH ASSESSMENT YEARS EVEN IF THE T AX EFFECT IS LESS THAN THE PRESCRIBED MONETARY LIMITS IN ANY OF THE YEAR(S), IF IT IS DECIDED TO FILED APPEAL IN RESPECT OF THE YEAR(S) IN WHICH TAX EFFECT EXCEEDS THE MONET ARY LIMIT PRESCRIBED. IN CASE WHERE A COMPOSITE ORDER / JUDGMENT INVOLVES MORE THAN ONE ASSESSEE, EACH ASSESSEE SHALL BE DEALT WITH SEPARATELY. 6. IN A CASE WHERE APPEAL BEFORE A TRIBUNAL OR A CO URT IS NOT FILED ONLY ON ACCOUNT OF THE TAX EFFECT BEIN G LESS THAN THE MONETARY LIMIT SPECIFIED ABOVE, THE COMMISSIONER OF INCOME-TAX SHALL SPECIFICALLY RECOR D THAT EVEN THOUGH THE DECISION IS NOT ACCEPTABLE, A PPEAL IS NOT BEING FILED ONLY ON THE CONSIDERATION THAT T HE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN THIS INSTRUCTION. FURTHER, IN SUCH CASES, THERE WILL BE NO PRESUMPTION THAT THE INCOME-TAX DEPARTMENT HAS ACQUIESCED IN THE DECISION ON THE DISPUTED ISSUES. THE INCOME-TAX DEPARTMENT SHALL NOT BE PRECLUDED FROM F ILING AN APPEAL AGAINST THE DISPUTED ISSUES IN THE CASE O F THE SAME ASSESSEE FOR ANY OTHER ASSESSMENT YEAR, OR IN THE CASE OF ANY OTHER ASSESSEE FOR THE SAME OR ANY OTHE R ASSESSMENT YEAR, IF THE TAX EFFECT EXCEEDS THE SPEC IFIED MONETARY LIMITS. ACIT VS. GEET CONSTRUCTION ITA NO.507/IND/2014 14 7. IN THE PAST, A NUMBER OF INSTANCES HAVE COME TO THE NOTICE OF THE BARD, WHEREBY AN ASSESSEE HAS CLAIMED RELIEF FROM THE TRIBUNAL OR THE COURT ONLY ON THE G ROUND THAT THE DEPARTMENT HAS IMPLICITLY ACCEPTED THE DEC ISION OF THE TRIBUNAL OR COURT IN THE CASE OF THE ASSESSE E FOR ANY OTHER ASSESSMENT YEAR OR IN THE CASE OF ANY OTH ER CASE 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 APPEAL IN SUCH CASES WAS O TILED OR NOT ADMITTED ONLY FOR THE REASON OF THE TAX EFFECT BEIN G LESS THAN THE SPECIFIED MONETARY LIMIT AND, THEREFORE, N O INFERENCE SHOULD BE DRAWN THAT THE DECISIONS RENDER ED THEREIN WERE ACCEPTABLE TO THE DEPARTMENT. ACCORDIN GLY, THEY SHOULD IMPRESS UPON THE TRIBUNAL OR THE COURT THAT SUCH CASES DO NOT HAVE ANY PRECEDENT VALUE. AS THE EVIDENCE OF NOT FILING APPEAL DUE TO THIS INSTRUCTI ON MAY HAVE TO BE PRODUCED IN COURTS, THE JUDICIAL FOLDERS IN THE OFFICE OF CIT MUST BE MAINTAINED IN A SYSTEMIC MANN ER FOR EASY RETRIEVAL. 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 LIMIT S SPECIFIED IN PARA 3 ABOVE OR THERE IS NO TAX EFFECT . ACIT VS. GEET CONSTRUCTION ITA NO.507/IND/2014 15 (A) WHERE THE CONSTITUTIONAL VALIDITY OF THE PROVIS IONS OF AN ACT OR RULE ARE UNDER CHALLENGE, OR (B) WHERE BOARDS ORDER, NOTIFICATION, INSTRUCTION OR CIRCULAR HAS BEEN HELD TO BE ILLEGAL OR ULTRA VIRES , OR WHERE REVENUE AUDIT OBJECTION IN THE CASE HAS BEE N ACCEPTED BY THE DEPARTMENT. 9. THE PROPOSAL FOR FILING SPECIAL LEAVE PETITION UN DER ARTICLE 136 OF THE CONSTITUTION BEFORE THE SUPREME COURT SHOULD, IN ALL CASES, BE SENT TO THE DIRECTORATE OF INCOME- TAX (LEGAL & RESEARCH), NEW DELHI AND THE DECISION T O FILE SPECIAL LEAVE PETITION SHALL BE IN CONSULTATION WITH THE MINISTRY OF LAW AND JUSTICE. 10. THE MONETARY LIMITS SPECIFIED IN PARA 3 ABOVE S HALL NOT APPLY TO WRIT MATTERS AND DIRECT TAX MATTERS OT HER THAN INCOME TAX. FILING OF APPEALS IN OTHER DIRECT TAX MATTERS SHALL CONTINUE TO BE GOVERNED BY THE RELEVA NT PROVISIONS OF STATUTE & RULES. FURTHER FILING OF AP PEAL 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 UNDER SECTIO N 12 A OF THE IT ACT, 1961, SHALL NOT BE GOVERNED BY THE LIMI TS SPECIFIED IN PAR 3 ABOVE AND DECISION TO FILE APPEA L IN SUCH CASES MAY BE TAKEN ON MERITS OF A PARTICULAR C ASE. ACIT VS. GEET CONSTRUCTION ITA NO.507/IND/2014 16 11. THIS INSTRUCTION WILL APPLY TO APPEALS FILED ON OR AFTER 10TH JULY, 2014. HOWEVER, THE CASES WHERE APPEALS HAVE BEEN FILED BEFORE 10TH JULY, 2014 WILL BE GOVE RNED BY THE INSTRUCTIONS ON THIS SUBJECT, OPERATIVE AT T HE TIME WHEN SUCH APPEAL WAS FILED. 12. THIS ISSUE UNDER SECTION 268A (1) OF THE INCOME -TAX ACT 1961. 5. ON QUERY FROM THE BENCH, THE LD. DR COULD NOT PO INT OUT ANY OF THE EXCEPTIONS AS PROVIDED IN THE CIRCULAR AS UNDER: (A) THAT THIS IS A LOSS CASE HAVING TAX EFFECT MORE THAN THE PRESCRIBED LIMIT, WHICH SHOULD BE TAKEN INTO ACCOUNT, (B) THAT THIS IS A COMPOSITE ORDER FOR MANY ASSESSMENT YEARS WHERE TAX EFFECT WILL BE MORE THAN THE PRESCRIBED LIMIT AS PER PARA 5 OF ABOVE INSTRUCTIONS, (C) THAT THIS IS A CASE, WHERE, IN THE CASE OF REVENUE, WHERE CONSTITUTIONAL VALIDITY OF THE PROVISION OF THE ACT OR I.T. RULES 1962 ARE UNDER CHALLENGE, (D) THAT BOARDS ORDER, NOTIFICATION, INSTRUCTION OR CIRCULAR HAS BEEN HELD TO BE ILLEGAL OR ULTRA VIRES, (E) THAT REVENUE AUDIT OBJECTION IN THE CASE HAS BEEN ACCEPTED BY THE DEPARTMENT AND THE SAME IS UNDER CHALLENGE. ACIT VS. GEET CONSTRUCTION ITA NO.507/IND/2014 17 THE LD. DR COULD NOT POINT OUT ANY OF THE EXCEPTIONS AS PROVIDED ABOVE. ACCORDINGLY, THIS BEING LOW TAX EFF ECT CASE, WE DISMISS THE APPEAL OF THE REVENUE IN LIMINE WITHOUT GOING INTO MERITS. 6. SINCE THE APPEAL OF THE REVENUE HAS BEEN DISMISSED, THE CROSS OBJECTION FILED BY THE ASSESSEE BECOMES INFRUCTUOUS AND AS SUCH IT IS ALSO DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE AND CROSS OBJECTION OF THE ASSESSEE STAND DISMISSED. PRONOUNCED IN OPEN COURT ON 20 TH AUGUST, 2015 SD SD (D.T. GARASIA) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER 20 TH AUGUST, 2015 DN/-