A.C.I.T Cir - 2,Hooghly, Hooghly V. The India Rice Mills (P) Ltd, Hooghly

ITA 1092/KOL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83099 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2005-2006
• Appeal Filed On: 06-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DAVID Z CHAWNGTHU
• Assessee Lawyers: N O N E
• Keywords: Audit objection; Question of law; Tax effect
• Section: 12; 260A

Judgement Text

I.T.A. NO.: 1092/ KOL. / 2013 ASSESSMENT YEAR : 2005-2006 PAGE 1 OF 9 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA SMC BENCH, KOLKATA BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER I.T.A. NO.: 1092/ KOL./ 2013 ASSESSMENT YEAR : 2005-2006 ASSISTANT COMMISSIONER OF INCOME TAX,.............. ..APPELLANT CIRCLE-2, HOOGHLY, AAYAKAR BHAWAN, G.T. ROAD, KHADINA MORE, CHINSURAH, HOOGHLY-712 101 -VS.- THE NEW INDIA RICE MILLS (P) LTD.,............... ...RESPONDENT VILL. MAINDRA, P.O. MOIGRAM, P.S. ARAMBAGH, DIST. HOOGHLY-712 602 [PAN : AABCT 9296 P] APPEARANCES BY: SHRI DAVID Z. CHAWNGTHU, ADDL.CIT, SR. D.R., FOR THE APPELLANT N O N E, FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : AUGUST 19, 2014 DATE OF PRONOUNCING THE ORDER : 02.09.2014 O R D E R PER SHRI MAHAVIR SINGH, JUDICIAL MEMBER : THIS APPEAL FILED BY THE REVENUE IS ARISING OUT OF THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-XXXVI, KOLKATA IN APPEAL NO. 561/CIT(A)-XXXVI/KOL/HG/10-11 DATED 12.02.2013 FOR THE ASSESSMENT YEAR 2005-06. 2. AT THE OUTSET, IT WAS STATED BY LD. COUNSEL FOR THE ASSESSEE THAT TAX EFFECT IN THIS APPEAL OF REVENUE IS BELOW THE PRESCRIBED MONETARY LIMITS FOR FILING OF APPEALS BEFORE ITAT. IN THIS APPEAL OF REVENUE QUANTUM OF PENALTY IS RS. 65,940/-. THE APPEAL RELATES TO ASSESSMENT YEAR 2005-06 AND FILED BEFORE THE TRIBUN AL ON 06.05.2013. LD COUNSEL FOR THE ASSESSEE STATED THAT IN VIEW OF THE RECENT INSTRUCT ION NO. 5/2014 ISSUED BY CBDT ON 10.07.2014 REVISING MONETARY LIMITS FOR FILING OF A PPEAL BEFORE ITAT FIXING THE TAX EFFECT LIMIT OF RS. 4 LACS, THE SAME IS NOT MAINTAINABLE AND LIA BLE TO BE DISMISSED IN LIMINE. THE ONLY ISSUE NOW REMAINS BEFORE US IS, WHETHER, THIS APPEA L OF REVENUE, WHICH IS BELOW THE I.T.A. NO.: 1092/ KOL. / 2013 ASSESSMENT YEAR : 2005-2006 PAGE 2 OF 9 PRESCRIBED LIMIT OF TAX EFFECT IN VIEW OF THE BOARD S INSTRUCTION NO.5/2014 ISSUED ON 10.07.2014 REVISING THE MONETARY LIMITS FOR FILING OF APPEALS BY THE DEPARTMENT BEFORE ITAT IS MAINTAINABLE OR NOT. LD. SR-DR DRAWN OUR ATTENTI ON TO PARA-11 OF THE INSTRUCTION AND ARGUED THAT THIS WILL APPLY TO THE APPEALS FILED ON OR AFTER 10.07.2014 AND NOT TO THE APPEAL FILED PRIOR TO 10-07.2014. HENCE, HE VEHEMENTLY OPP OSED THE ARGUMENT OF LD. COUNSEL FOR THE ASSESSEE AND STATED THAT THIS INSTRUCTION IS PR OSPECTIVE AND NOT RETROSPECTIVE. 3. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUG H THE FACTS AND CIRCUMSTANCES OF THE CASE. AT THE OUTSET, IT IS SEEN THAT HONBLE DE LHI HIGH COURT IN THE CASE OF CIT VS M/S. P. S. JAIN & CO. IN ITA NO.179/1991 DATED 02.08.2010 H AS 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 E XPENSES HAS GONE UP, THE ASSESSEES ON THE FILE OF THE DEPARTMENTS HAVE BEEN INCREASED CONSEQUENTLY, THE BURDEN ON THE DEPARTMENT HAS ALSO INCREASED TO A TR EMENDOUS 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 D ECISION NOT TO FILE REFERENCES IF THE TAX EFFECT LESS THAN RS. 2 LAKHS. THE SAME POL ICY FOR OLD MATTERS NEEDS TO BE ADOPTED BY THE DEPARTMENT. IN OUR VIEW, THE BOARD S CIRCULAR DATED MARCH 27, 2000 IS VERY MUCH APPLICABLE EVEN TO THE OLD REFERE NCES WHICH ARE STILL UNDECIDED. THE DEPARTMENT IS NOT JUSTIFIED IN PROC EEDING WITH THE OLD REFERENCES WHEREIN THE TAX IMPACT IS MINIMAL. THUS, THERE IS NO JUSTIFICATION TO PROCEEDS WITH DECADES OLD REFERENCES HAVING NEGLIGIBLE TAX E FFECT. 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 WAS A SPECIFIC CONDITION IN THAT INSTRUCTION ALSO THAT TH E SAME WOULD APPLY TO APPEALS FILE ON OR AFTER FEBRUARY, 2011. HONBLE HIGH COURT HAS CONSID ERED 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 T HE BOMBAY HIGH COURT IN TAX APPEAL NO. 78 OF 2007, THE COMMISSIONE R OF INCOME TAX V. SMT. VIJAYA V. KAVEKAR DECIDED ON 29.7.2011. THE DI VISION BENCH, AFTER CONSIDERING EARLIER INSTRUCTIONS AND VARIOUS DECISI ONS OF THE COURTS ON INSTRUCTIONS, RELYING ON THE DECISION IN COMMISSION ER 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: I.T.A. NO.: 1092/ KOL. / 2013 ASSESSMENT YEAR : 2005-2006 PAGE 3 OF 9 '9. AS STATED EARLIER, THE INCOME TAX ACT WAS AMEND ED AND SECTION 268A HAS BEEN INTRODUCED ON THE STATUTE BOOK WITH R ETROSPECTIVE EFFECT. SECTION 268A CARVES OUT AN EXCEPTION FOR FI LING OF APPEALS AND REFERENCES UNDER SECTION 260 A OF THE ACT. THE LEGISLATURE HAS PRESCRIBED THAT THE CBDT IS EMPOWERED TO ISSUE CIRC ULARS 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 'CO MMISSIONER OF INCOME TAX V/S MADHUKAR K. INAMDAR (HUF) REPORTED I N '(2010) 229 CTR (BOM) 77, INTERPRETED THE AFORESAID CIRCULA R. THE CIRCULAR WAS ISSUED IN SUPERSESSION OF ALL EARLIER INSTRUCTI ONS ISSUED BY THE BOARD. THE MONETARY LIMIT WAS INCREASED AND APPEALS WERE TO BE FILED UNDER SECTION 260A, THEREAFTER, ONLY IN CASES WHERE THE TAX EFFECT EXCEEDED RS. 4 LACS. PARAGRAPH 11 OF THAT IN STRUCTION STIPULATED THAT IT WAS APPLICABLE TO APPEALS FILED ON OR AFTER 15TH MAY, 2008. IT WAS FURTHER PROVIDED THAT IN CASES, W HERE APPEALS WERE FILED BEFORE 15TH MAY, 2008, THEY WOULD BE GOV ERNED BY THE INSTRUCTIONS ON THIS SUBJECT WHICH WERE OPERATIVE A T THE TIME WHEN SUCH APPEALS WERE FILED. THE INSTRUCTION WAS ISSUED UNDER SECTION 268A(1) OF THE ACT. THE ARGUMENT OF THE LEARNED COU NSEL FOR THE REVENUE IN THAT CASE WAS, THAT THE INSTRUCTION ISSU ED ON 15TH MAY, 2008 DID NOT PRECLUDE THE DEPARTMENT FROM CONTINUIN G WITH THE APPEALS AND/OR PETITIONS FILED PRIOR TO 15TH MAY, 2 008, IF THEY INVOLVED A SUBSTANTIAL QUESTION OF LAW OF A RECURRI NG NATURE, NOTWITHSTANDING THE FACT THAT THE TOTAL CUMULATIVE TAX EFFECT INVOLVED IN THE APPEALS WAS LESS THAN RS. 4 LACS. I T 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 CONSIDERI NG THE ISSUE OBSERVED THAT PARAGRAPH 5 OF THE CIRCULAR MADE IT C LEAR THAT NO APPEALS WOULD BE FILED IN THE CASES INVOLVING TAX E FFECT LESS THAN RS. 4 LACS NOTWITHSTANDING THE ISSUE BEING OF RECURRING NATURE. RELYING ON THE JUDGEMENT IN CIT V/S POLYCOTT CORPORATION, T HE COURT OBSERVED AS FOLLOWS: '6 THE AFORESAID JUDICIAL VERDICT MAKES IT CLEAR TH AT THE CIRCULAR DT. 15TH MAY, 2008 IN GENERAL AND PARA (5) THEREOF IN P ARTICULAR LAY DOWN THAT EVEN IF THE SAME ISSUE, IN RESPECT OF SAM E ASSESSEE, FOR OTHER ASSESSMENT YEARS IS INVOLVED, EVEN THEN THE D EPARTMENT I.T.A. NO.: 1092/ KOL. / 2013 ASSESSMENT YEAR : 2005-2006 PAGE 4 OF 9 SHOULD NOT FILE APPEAL, IF THE TAX EFFECT IS LESS T HAN RS. 4 LAKHS. IN OTHER WORDS, EVEN IF THE QUESTION OF LAW IS OF RECU RRING NATURE EVEN THEN, THE REVENUE IS NOT EXPECTED TO FILE APPEALS I N SUCH CASES, IF THE TAX IMPACT IS LESS THAN 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 CONTEND T HAT THE CIRCULAR DT. 15TH MAY, 2008 ISSUED BY THE CBDT IS APPLICABLE TO THE CASES FILED AFTER 15TH MAY, 2008 AND IN COMPLIANCE THEREO F, THEY DO NOT FILE APPEALS, IF THE TAX EFFECT IS LESS THAN RS. 4 LAKHS; BUT THE SAID CIRCULAR 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 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 E VEN FOR PENDING CASES. ACCORDINGLY, THE COURT DISMISSED ALL THE APP EALS 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. THE MONETARY LIMIT HAS BEEN RAISED AGAIN AND CLAUSE 3 OF THE INSTRUCTIONS PROVIDES THAT APPE ALS SHALL NOT BE FILED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONE TARY LIMITS PRESCRIBED, HENCEFORTH. THE MONETARY LIMITS PRESCRIBED FOR FILI NG AN APPEAL UNDER SECTION 260A BEFORE THE HIGH COURT HAS BEEN RAISED TO RS. 10 LACS. THIS INSTRUCTION IS IDENTICAL TO THE CBDT INSTRUCTION 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 FU RTHER PROVIDES THAT WHERE THE TAX EFFECT IS NOT QUANTIFIABLE, THE DEPARTMENT SHOULD TAKE A DECISION TO FILE APPEALS ON MERITS OF EACH CASE. CLAUSE 11, AGA IN PROVIDES THAT THE INSTRUCTION WOULD APPLY TO APPEALS FILED ON OR AFTE R ....2011 AND APPEALS FILED BEFORE ...... 2011 WOULD BE GOVERNED BY THE I NSTRUCTIONS 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. MADHUKAR IN AMDAR (SUPRA), THE SAME PRINCIPLES MUST APPLY IN THE PRESENT CASES ALSO, AS WE HAVE FOUND THAT THE INSTRUCTIONS OF 15TH MAY, 2008 IS PARA- MATERIAL WI TH THE INSTRUCTION OF 9TH FEBRUARY, 2011. I.T.A. NO.: 1092/ KOL. / 2013 ASSESSMENT YEAR : 2005-2006 PAGE 5 OF 9 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 EARLIER JUDGEMENT 'COMMISSIONER INCOME TAX DELHI-II I V/S M/S P.S. JAIN AND CO. DECIDED ON 2ND AUGUST, 2010 HAS HELD THAT T HE CBDT CIRCULAR RAISING THE MONETARY LIMIT OF THE TAX EFFECT TO RS. 10 LACS WOULD BE APPLICABLE TO PENDING CASES ALSO. 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 INSTRUCTION OF 2005 WHICH WAS CONSIDERED IN CHHAJER'S CASE HAS ALSO BEEN INTERPRETED IN POLYCOT CORPORATION (SUPRA). THE CONSISTENT VIEW OF THE COURT HAS BEEN THAT THE CBDT INSTRUCTION WOULD APPLY TO PENDING CA SES AS WELL. THE MAIN OBJECTIVE OF SUCH INSTRUCTIONS IS TO REDUCE THE PEN DING LITIGATION WHERE THE TAX EFFECT IS CONSIDERABLY SMALL. THEREFORE, IN OUR OPINION, THE TAX APPEALS ARE REQUIRED TO BE DISMISSED, AS THEY ARE NOT MAINT AINABLE IN VIEW OF THE PROVISIONS OF SECTION 268A OF THE INCOME TAX, AND T HE 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 BE NCH HAS CONSIDERED 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, W ITHOUT EXPRESSING ANY OPINION ON THE MERITS OF THE CLAIM, MAKING IT CLEAR THAT THE DEPARTMENT IS AT LIBERTY TO PROCEED AGAINST THE ASSESSEE IN FUTUR E, IF THERE ANY AMOUNT DUE FROM THE ASSESSEE, ON SIMILAR ISSUE AND IF IT I S ABOVE THE MONETARY LIMIT PRESCRIBED.' 4. WE FIND FROM THE ABOVE CASE LAW OF HONBLE GUJAR AT HIGH COURT IN THE CASE OF SURESHCHANDRA DURGAPRASAD KHATOD (HUF), (SUPRA) THAT IN THE SIMILAR SITUATION AND E XACTLY IDENTICAL INSTRUCTIONS WERE APPLIED TO THE APPEALS FILED RETROSPECTIVELY. HONBLE GUJARAT HIGH COURT HAS DISCUSSED THAT ALMOST ALL HIGH COURTS ARE OF THE UNANIMOUS VIEW, CONSIDERING THE MAIN OBJECTIVE OF SUCH INSTRUCTIONS THAT TO REDUCE THE PENDING LITIGATION, WHERE THE TAX EFFECT IS CONSIDERABLE LOW OR SMALL, THE APPEAL IS NOT MAINTAINABLE. THE RECENT INSTRUCTION REVISING THE MONETARY LIMIT TO RS. 4 LAKH FOR FILIN G APPEAL BEFORE ITAT ON INCOME TAX MATTERS, I.T.A. NO.: 1092/ KOL. / 2013 ASSESSMENT YEAR : 2005-2006 PAGE 6 OF 9 AS ISSUED VIDE INSTRUCTION NO.5/2014 FNO279/MISC.14 2/2007-ITJ(PT) DATED 10 TH JULY, 2014 WILL APPLY TO PENDING APPEALS ALSO FOR THE REASON T HAT THE SAME IS EXACTLY IDENTICAL TO EARLIER INSTRUCTIONS. THE RELEVANT CIRCULAR ISSUED BY CBDT READS AS UNDER: REFERENCE IS INVITED TO BOARDS INSTRUCTION NO 3/2 011 DATED 09/02/2011 WHEREIN MONETARY LIMITS AND OTHER CONDITIONS FOR FILING DEP ARTMENTAL 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 LIMI TS AND CONDITIONS SPECIFIED BELOW. 3. HENCEFORTH APPEALS SHALL NOT BE FILED IN CASES W HERE 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 MONETARY LIMITS PRESCRIBED ABOVE. FILIN G OF APPEAL IN SUCH CASES IS TO BE DECIDED ON MERITS OF THE CASE. 4. FOR THIS PURPOSE, TAX EFFECT MEANS THE DIFFERENCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND THE TAX THAT WOULD HAVE BEEN CH ARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF THE ISSUES AGAINST WHICH APPEAL IS INTENDED TO BE FILED (HEREINAFTER REFERRED TO AS DISPUTED ISSUES ). HOWEVER THE TAX WILL NOT INCLUDE ANY INTEREST THEREON, EXCEPT WHERE CHARGEABILITY OF INTEREST ITSELF IS IN DISPUTE. IN CASE THE CHARGEABILITY OF INTEREST IS T HE ISSUE UNDER DISPUTE, THE AMOUNT OF INTEREST SHALL BE THE TAX EFFECT. IN CASES WHERE RE TURNED 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 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 I.T.A. NO.: 1092/ KOL. / 2013 ASSESSMENT YEAR : 2005-2006 PAGE 7 OF 9 ASSESSEE, THE DISPUTED ISSUES ARISE IN MORE THAN ON E ASSESSMENT YEAR, APPEAL, CAN BE FILED IN RESPECT OF SUCH ASSESSMENT YEAR OR YEARS I N 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 ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN PARA 3 . IN OTHER WORDS, HENCEFORTH, APPEALS CAN BE FILED ONLY WITH REFERENCE TO THE TAX EFFECT IN THE RELEVA NT ASSESSMENT YEAR. HOWEVER, IN CASE OF A COMPOSITE ORDER OF ANY HIGH COURT OR APPELLATE AUTHORITY, WHICH INVOLVES MORE THAN ONE ASSESSMENT YEAR AND COMMON ISSUES IN MORE THAN ONE ASSESSMENT YEAR, APPEAL SHALL BE FILED IN RESPECT OF ALL SUCH ASSESS MENT YEARS EVEN IF THE TAX 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 EFFEC T EXCEEDS THE MONETARY LIMIT PRESCRIBED. IN CASE WHERE A COMPOSITE ORDER / JUDGM ENT 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 S PECIFIED ABOVE, THE COMMISSIONER OF INCOME-TAX SHALL SPECIFICALLY RECORD THAT EVEN THOUGH THE DECISION IS NOT ACCEPTABLE, APPEAL IS NOT BEING FILED ONLY ON THE CONSIDERATION THAT THE 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 DI SPUTED ISSUES. THE INCOME-TAX DEPARTMENT SHALL NOT BE PRECLUDED FROM FILING AN AP PEAL AGAINST THE DISPUTED ISSUES IN THE CASE OF THE SAME ASSESSEE FOR ANY OTHER ASSESSM ENT YEAR, OR IN THE CASE OF ANY OTHER ASSESSEE FOR THE SAME OR ANY OTHER ASSESSMENT YEAR, IF THE TAX EFFECT EXCEEDS THE SPECIFIED MONETARY LIMITS. 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 TH E 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 ANY OTHER ASSESSMENT YEAR OR IN TH E CASE OF ANY OTHER CASE FOR THE SAME OR ANY OTHER ASSESSMENT YEAR, BY NOT FILING AN APPEAL ON THE SAME DISPUTED ISSUES. THE DEPARTMENTAL REPRESENTATIVES/COUNSELS M UST MAKE EVERY EFFORT TO BRING TO THE NOTICE OF THE TRIBUNAL OR THE COURT THAT THE AP PEAL 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, NO INFERENCE SHOULD BE DRAWN THAT THE DECISIONS RENDERED THEREIN WERE ACCEPTABLE TO THE DEPARTMENT. ACCORDINGLY, THE Y SHOULD IMPRESS UPON THE TRIBUNAL OR THE COURT THAT SUCH CASES DO NOT HAVE A NY 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 CSIT MUST BE MAINTAINED IN A SYSTEMIC MANNER FOR EASY RETRIEVAL. I.T.A. NO.: 1092/ KOL. / 2013 ASSESSMENT YEAR : 2005-2006 PAGE 8 OF 9 8. ADVERSE JUDGMENTS RELATING TO THE FOLLOWING ISSU ES SHOULD BE CONTESTED ON MERITS NOTWITHSTANDING THAT THE TAX EFFECT ENTAILED IS LES S THAN THE MONETARY LIMITS SPECIFIED IN PARA 3 ABOVE OR THERE IS NO TAX EFFECT. (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 (C) WHERE REVENUE AUDIT OBJECTION IN THE CASE HAS B EEN ACCEPTED BY THE DEPARTMENT. 9. THE PROPOSAL FOR FILING SPECIAL LEAVE PETITION U NDER ARTICLE 136 OF THE CONSTITUTION BEFORE THE SUPREME COURT SHOULD, IN ALL CASES, BE S ENT 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 JU STICE. 10. THE MONETARY LIMITS SPECIFIED IN PARA 3 ABOVE S HALL NOT APPLY TO WRIT MATTERS AND DIRECT TAX MATTERS OTHER THAN INCOME TAX. FILING OF APPEALS IN OTHER DIRECT TAX MATTERS SHALL CONTINUE TO BE GOVERNED BY THE RELEVANT PROVI SIONS OF STATUTE & 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 TRUST S OR INSTITUTIONS UNDER SECTION 12 A OF THE IT ACT, 1961, SHALL NOT BE GOVERNED BY THE LIMI TS SPECIFIED IN PAR 3 ABOVE AND DECISION TO FILE APPEAL IN SUCH CASES MAY BE TAKEN ON MERITS OF A PARTICULAR CASE. 11. THIS INSTRUCTION WILL APPLY TO APPEALS FILED ON OR AFTER 10 TH JULY, 2014. HOWEVER, THE CASES WHERE APPEALS HAVE BEEN FILED BEFORE 10 TH JULY, 2014 WILL BE GOVERNED BY THE INSTRUCTIONS ON THIS SUBJECT, OPERATIVE AT THE 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 MOR E THAN THE PRESCRIBED LIMIT, WHICH SHOULD BE TAKEN INTO ACCOUNT, (B) THAT THIS IS A COMPOSITE ORDER FOR MANY ASSESSM ENT 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 REVE NUE, WHERE CONSTITUTIONAL VALIDITY OF THE PROVISION OF THE ACT OR I.T. RULES 1962 ARE UNDER CHALLENGE, I.T.A. NO.: 1092/ KOL. / 2013 ASSESSMENT YEAR : 2005-2006 PAGE 9 OF 9 (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 BE EN ACCEPTED BY THE DEPARTMENT AND THE SAME IS UNDER CHALLENGE. THE LD. DR COULD NOT POINT OUT ANY OF THE EXCEPTION S AS PROVIDED ABOVE. ACCORDINGLY, THIS BEING A LOW TAX EFFECT CASE, WE DISMISS THE APPEAL OF THE REVENUE IN LIMINE WITHOUT GOING INTO MERITS. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS D ISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 2 ND DAY OF SEPTEMBER, 2014. SD/- MAHAVIR SINGH (JUDICIAL MEMBER) KOLKATA, THE 2 ND DAY OF SEPTEMBER, 2014 COPIES TO : (1) ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-2, HOOGHLY, AAYAKAR BHAWAN, G.T. ROAD, KHADINA MORE, CHINSURAH, HOOGHLY-712 101 (2) THE NEW INDIA RICE MILLS (P) LTD., VILL. MAINDRA, P.O. MOIGRAM, P.S. ARAMBAGH, DIST. HOOGHLY-712 602 (3) CIT (4) CIT(A) (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ETC ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.