The ITO, Ward-7(1), Ahmedabad V. Mudresh J.Purohit, Dist.Ahamedabad

ITA 127/AHD/2008

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9253 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 7 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 12-08-2009
• Assessment Year: 2003-2004
• Appeal Filed On: 07-01-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M C PANDIT
• Assessee Lawyers: T P HEMANI
• Keywords: Question of law; Difference of opinion; Tax effect; TDS; Set aside
• Section: 43B; 268A

Judgement Text

ITA NO.127/AHD/2008 (ASSTT.YEAR:- 2003-2004) 1 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'A' (BEFORE S/SHRI H L KARWA AND D C AGARWAL) ITA NO.127/AHD/2008 (ASSTT.YEAR:- 2003-2004) ACIT, CIR-7, AHMEDABAD. V/S SHRI MUDRESH J PUROHIT, C/O. SURYA OFFSET, AMBLI VILLAGE, TAL. DASCROI, DIST. AHMEDABAD. PAN: ABOPP 5822 G (APPELLANT) (RESPONDENT) APPELLANT BY :- SHRI M C PANDIT, SR. DR RESPONDENT BY:- SHRI T P HEMANI O R D E R PER D C AGRAWAL (ACCOUNTANT MEMBER): THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY THE COMMISSION ER OF INCOME-TAX (APPEALS)-XI, AHMEDABAD [CIT(A) FOR SHORT] DATED 18-10-2007 FOR THE ASSESSMENT YEAR (AY) 2003-2004. THE EFFECTIVE GROUN DS RAISED BY THE REVENUE READ AS UNDER: 1 THE LEARNED COMMISSIONER OF INCOME TAX(A)-XI, AHMED ABAD ERRED IN LAW AND ON FACTS IN DIRECTING TO ALLOW THE DEDUC TION FOR THE PAYMENT MADE TO PF AND ESI BOTH FOR EMPLOYEES AND E MPLOYERS CONTRIBUTION ON THE BASIS OF ACTUAL PAYMENT DURING THE RELEVANT PREVIOUS YEAR. 2 THE LD. COMMISSIONER OF INCOME TAX(A)- XI, AHMEDABA D HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION MADE O F RS. 61,222/- BEING THE EMPLOYEESS CONTRIBUTION TO THE PROVIDENT FUND WHICH WERE PAID AFTER THE DUE DATES IGNORING THE PROVISIO NS OF SECTION 2(24)(X) READ WITH SECTION 36(1)(VA) OF THE INCOME TAX ACT, 1961. 3 THE LD. COMMISSIONER OF INCOME TAX (A)- XI, AHMEDAB AD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION MADE O F RS. 69,470/- BEING THE EMPLOYERS CONTRIBUTION TO THE PROVIDENT FUND WHICH WERE PAID AFTER THE DUE DATES IGNORING THE PROVISIONS OF THE SECOND PROVISO TO SECTION 43B OF THE INCOME TAX ACT, 1961. ITA NO.127/AHD/2008 (ASSTT.YEAR:- 2003-2004) 2 4 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (A)- XI, AHMEDABAD OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 5 IT IS THEREFORE PRAYED THAT THE ORDER OF THE LD. CO MMISSIONER OF INCOME TAX(A) XI, AHMEDABAD MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 2. SHRI S R SHAH, THE LEARNED AR HAS CONTENDED THAT IN THIS CASE THE REVENUE EFFECT IN THE APPEAL FILED BY THE REVENUE I S BELOW RS.2 LAKHS. THE ASSESSEES CONTENTION IS THAT THE LIMIT HAS BEEN IN CREASED BY THE SUBSEQUENT CIRCULAR OF THE BOARD DATED 24TH OCTOBER, 2005 AND, THEREFORE, THE APPEAL SHOULD NOT BE ENTERTAINED IN VIEW OF THE BOMBAY HIG H COURT DECISION IN THE CASE OF PITHWA ENGGG. WORKS 276 ITR 519. 3. THE LEARNED DR POINTED OUT THAT NEITHER THE CIRC ULAR NOR THE DECISION IN THE CASE OF PITHWA ENGG. WORKS 276 ITR 519 WILL HAV E ANY APPLICATION. HE ALSO RELIED ON THE DECISIONS OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASES OF RANI PALIWAL V CIT 268 ITR 220 (P&H) AND C IT V. ABHISHEK INDUSTRIES LTD. (2006) 286 ITR 1 (P&H). 4. FURTHER, WE FIND THAT THE APPEAL IS NOT MAINTAIN ABLE IN A CASE WHERE THE FINAL ASSESSMENT HAS BEEN MADE ON LOSS AND INSTRUCT ION 1979 DATED 27-3-2000 WILL EQUALLY BE APPLIED. IN THIS REGARD WE RELY ON THE DECISION OF THE ITAT SPECIAL BENCH IN THE CASE OF JCIT V PEERLESS DEVELO PERS LTD. (2006) 103 ITD 349 (KOL) (SB). ALTHOUGH DIFFERENT HIGH COURTS HAVE TAKEN A DIFFERENT VIEW BUT THERE IS NO DECISION OF THE HON'BLE JURISDICTIO NAL HIGH COURT ON THIS ISSUE. THE DECISION OF THE PUNJAB & HARYANA HIGH COURT HAS BEEN DULY DISCUSSED BY THE SPECIAL BENCH OF ITAT. THUS, THE CASE OF THE AS SESSEE IS DULY COVERED IN VIEW OF THE DECISION OF THE SPECIAL BENCH OF ITAT I N THE CASE OF PEERLESS DEVELOPERS LTD. (SUPRA) AND ACCORDINGLY THE APPEAL SHOULD BE DISMISSED IN LIMINE. ITA NO.127/AHD/2008 (ASSTT.YEAR:- 2003-2004) 3 5. AFTER HEARING THE LEARNED DR AND PERUSING RECORD , WE FIND THAT THE REVENUE EFFECT INVOLVED IN THE PRESENT APPEAL FILED BY THE REVENUE IS LESS THAN RS.2 LAKHS, AND THEREFORE, THE APPEAL IS NOT MAINTA INABLE IN THE LIGHT OF THE DECISION OF THE ITAT IN THE CASE OF ASSTT. CIT V. R AJOO ENGINEERS LTD (RAJKOT) [2006] 100 LTD 555 (RAJKOT). IN THE SAID CASE THE F ACTS ARE THAT CONSEQUENT UPON THE DIRECTION ISSUED BY THE COMMISSIONER (APPE ALS) TO ALLOW THE ASSESSEE- COMPANYS CLAIM UNDER SECTION 8OHHC WITHOUT EXCLUDI NG DEDUCTION ALLOWED UNDER SECTIONS 80-I AND 80G, THE IMPUGNED ADDITION MADE ON THAT ACCOUNT IN EXCESS OF RS. 1 LAKH STOOD DELETED. THOUGH THE REVE NUE FILED THE APPEAL ON 21- 6-2005 WHEN THE MONETARY LIMIT FOR FILING THE APPEA L WAS PRESCRIBED BY THE CBDT AT RS.1 LAKH, THE ASSESSEES CONTENTION WAS TH AT THE SAID LIMIT HAS BEEN INCREASED BY THE CBDTS SUBSEQUENT CIRCULAR DATED 2 4-10-2005 AND, THEREFORE, THE APPEAL SHOULD NOT BE ENTERTAINED IN VIEW OF THE HIGH COURTS DECISION IN THE CASE OF CITY. PITHWA ENGG. WORKS (2005) 276 ITR 519 (BOM). THE REVENUE, HOWEVER, CONTENDED THAT THE NEW LIMIT APPLIES ONLY TO APPEALS FILED AFTER 30-10- 2005 AND THE AFORESAID DECISION OF THE HIGH COURT H AD NO APPLICATION FOR THE INCREASED LIMIT UNDER THE NEW CIRCULAR, AND THAT IN ANY CASE, THE INSTANT CASE WAS COVERED BY THE EXCEPTION PROVIDED IN CLAUSE 3 OF TH E SAID CIRCULAR SINCE THERE INVOLVED A SUBSTANTIAL QUESTION OF LAW. THE ITAT HE LD AS UNDER : IT IS TRUE THAT THE HIGH COURT DECISION IN CIT V. PITHWA ENGG. WORKS [2005] 276 ITR 519] WAS NOT DEALING WITH THE NEW LI MIT OF THE CIRCULAR DATED24-10-2005. IT WAS WITH REFERENCE TO THE EARLI ER CIRCULAR WHERE REFERENCE WAS NOT REQUIRED TO BE FILED TO THE HIGH COURT IF THE TAX EFFECT WAS LESS THAN RS. 2 LAKHS. THE CONTENTION OF THE RE VENUE IN THAT CASE WAS THAT RS. 2 LAKHS LIMIT WAS INCREASED BY CIRCULAR DA TED 27-3 -2000 AND PRIOR TO THAT, THE LIMIT WAS ONLY RS. 50,000 AND TH E CONTENTION OF THE REVENUE WAS THAT THE NEW LIMIT WOULD NOT BE APPLICA BLE TO THE OLD REFERENCES. THE HIGH COURT REJECTED THE SAID CONTEN TION OF THE REVENUE. IN THOSE CIRCUMSTANCES, THOUGH THE SAID HIGH COURT DECISION DID NOT DEAL WITH THE CIRCULAR DATED 24-10-2005, BU T IT HAD DEALT WITH THE EARLIER CIRCULAR AND THE LIMITS OF T HAT CIRCULAR WERE APPLIED EVEN TO THE CASES WHICH WERE PRIOR TO THE OLD CIRCULAR. THEREFORE, THE RATIO OF THAT DECISION WAS APPLICABLE ITA NO.127/AHD/2008 (ASSTT.YEAR:- 2003-2004) 4 IN THE INSTANT CASE AS WELL. THE CBDT HAS TAKEN A P OLICY DECISION NOT TO FILE APPEALS IN SUCH TYPE OF CASES AND THE CIRCULAR IS BINDING ON THE REVENUE EVEN TO APPEALS FILED BEFORE 31-10-2005 AND THE DEPARTMENT WOULD NOT BE J USTIFIED IN PROCEEDING WITH THOSE APPEALS WITHIN THE MONETAR Y LIMIT OF TAX EFFECT PRESCRIBED IN THE CIRCULAR DATED 24-1 0-2005. WE HAVE ALSO GONE THROUGH THE DECISION OF THE SPECI AL BENCH IN THE CASE OF PEERLESS DEVELOPERS LTD. (SUPRA). WE FIND THAT IN T HIS CASE IT HAS BEEN HELD AS UNDER: CBDT INSTRUCTION NO.1979, DATED 27-3-2000 STATES T HAT WHERE THE TAX EFFECT IN AN APPEAL IS LESS THAN RS.2 LAKH, THE DEP ARTMENT SHOULD NOT FILE ANY APPEAL BEFORE THE TRIBUNAL. THE AO IN THE ASSES SMENT MADE FOR THE ASSESSMENT YEAR 1997-98 HAD ADDED THE SUM OF RS.69, 84,089 WHILE DETERMINING THE INCOME OF THE ASSESSEE FOR THE ASSE SSMENT YEAR 1997-98, BUT IN THE ASSESSMENT YEAR 1996-97 HAD NOT ALLOWED DEDUCTION FOR THE SUM OF RS.69,84,089 CLAIMED BY THE ASSESSEE. THUS, IF THE ADDITION IN THE YEAR UNDER APPEAL WAS UPHELD AND, CONSEQUENTLY, THE REVENUE HAD TO DELETE THE ADDITION MADE IN THE ASSESSMENT YEAR 199 7-98 OR VICE VERSA, THE TAX EFFECT OF THE SAME WOULD BE ZERO, IN VIEW O F THE FACT THAT THE INCOME DETERMINED IN THE ASSESSMENT YEAR 1996-97 WA S LOSS OF RS.5,74,69, 643 AND THE INCOME DETERMINED IN THE AS SESSMENT YEAR 1997-98 WAS ALSO A LOSS OF RS.2,76,81,893. FURTHER , SIMILAR ISSUE IN THE HANDS OF THE ASSESSEE ITSELF WAS DECIDED IN FAVOUR OF THE ASSESSEE FOR THE ASSESSMENT YEARS 1993-94, 1995-96 AND 1997-98 TO 19 99-2000 AND THE DEPARTMENT HAD ACCEPTED THE SAID DECISION OF THE TR IBUNAL, AS REVENUE COULD NOT BRING ANY MATERIAL TO SHOW THAT ANY APPEA L WAS PREFERRED TO THE HIGH COURT AGAINST THOSE ORDERS. IN THE CIRCUMS TANCES, AS THE ISSUE WAS ALREADY A DECIDED ISSUE AND COUPLED WITH THE FA CT THAT THE TAX EFFECT ON THE SAME WAS NIL, THE ISSUE EVEN IF INVOLVED A Q UESTION OF LAW, THE SAME COULD NOT BE TREATED AS A SUBSTANTIAL QUESTION OF LAW. CONSEQUENTLY, THE APPEAL FILED BY THE REVENUE WAS N OT MAINTAINABLE AND WAS REQUIRED TO BE DISMISSED. IN THE RESULT, THE APPEAL OF THE REVENUE WAS TO BE DISMISSED IN LIMINE. OUR AFORESAID VIEW IS ALSO SUPPORTED BY THE DECISIO N OF THE JURISDICTIONAL HIGH COURT IN TAX APPEAL NOS.1402 TO 1405 OF 2007 AND OT HERS IN THE CASE OF CIT V ITA NO.127/AHD/2008 (ASSTT.YEAR:- 2003-2004) 5 CONCORD PHARMACEUTICALS, JUDGMENT DATED 05-08-2008, WHEREIN IT HAS BEEN HELD AS UNDER: 17. HAVING HEARD LEARNED COUNSELS APPEARING FAR T HE RESPECTIVE PARTIES AND HAVING GONE THROUGH THE RELEVANT STATUT ORY PROVISIONS, JUDGMENTS OF VARIOUS COURTS AND CIRCULARS ISSUED BY THE BOARD FROM TIME TO TIME, WE ARE OF THE VIEW THAT SUBJECT TO CE RTAIN DIRECTIONS, WHICH ARE ISSUED HEREINAFTER, ALL THESE TAX APPEALS DESER VE TO BE DISMISSED AND THEY ARE ACCORDINGLY DISMISSED AS NO QUESTION OF LA W, MUCH LESS, ANY SUBSTANTIAL QUESTION OF LAW ARISES OUT OF THE ORDER OF THE TRIBUNAL. IN ALMOST AU CASES THE TRIBUNAL HAS DISMISSED THE APPE ALS ONLY ON THE GROUND OF LOW TAX EFFECT, WITHOUT ENTERING INTO MER ITS OF THE MATTER. WHILE DISMISSING THE APPEALS, THE TRIBUNAL HAS REFE RRED TO THE CIRCULAR ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES PRESCRI BING THE MONETARY LIMIT. THE APPEALS FILED BY THE DEPARTMENT IN CONTR AVENTION OF SUCH CIRCULARS PRESCRIBING THE MONETARY LIMIT WERE ORDER ED TO BE DISMISSED. ALMOST ALL COURTS ARE AGREEABLE ON THIS ISSUE. 18. THE REAL CONTROVERSY AROSE WHEN CERTAIN EXCEPT IONS ARE CARVED OUT IN THE CIRCULARS AND DESPITE THE FACT THAT MANY OF THESE CASES BEFORE THE TRIBUNAL ARE COVERED BY THOSE EXCEPTIONS, WHICH REQUIRE THE TRIBUNAL TO GO INTO THE MERITS OF THE MATTER, THE TRIBUNAL H AS STRAIGHTWAY DISMISSED THOSE APPEALS. THERE IS A CLEAVAGE OF OPI NION AMONGST THE DIFFERENT COURTS ON THIS ISSUE. ONE VIEW IS THAT WH ILE APPLYING THE CIRCULAR ISSUED BY THE BOARD, THE TRIBUNAL HAS TO T AKE INTO CONSIDERATION AS TO WHETHER THE EXCEPTIONS CARVED OUT IN THE CIRC ULAR APPLY TO THE CASE ON HAND AND IF ANY OF THOSE EXCEPTIONS IS APPLICABL E IN THAT CASE THE TRIBUNAL WILL HAVE TO IGNORE THE MONETARY LIMIT AND DECIDE THE APPEAL AN MERITS. IN KODANAND TEA ESTATE COS CASE (SUPRA), B EFORE THE TRIBUNAL, THE APPLICABILITY OF THE CIRCULAR WAS QUESTIONED. T HE MADRAS HIGH COURT, THEREFORE, TOOK THE VIEW THAT THE QUESTION COMES WI THIN THE AMBIT OF EXCEPTION AND THE TRIBUNAL WAS DIRECTED TO HEAR APP EAL ON THE MERITS. 19. ANOTHER VIEW IS THAT IF ANY PARTICULAR CIRCULAR IS PRESSED INTO SERVICE SEEKING DISMISSAL OF APPEAL ON THE GROUND OF LOW TA X EFFECT AND IF NO OBJECTION IS RAISED BY THE DEPARTMENT EITHER IN THE APPEAL MEMO OR AT THE TIME OF HEARING OF APPEAL, THE TRIBUNAL IS NOT BOUN D TO CONSIDER AS TO WHETHER EXCEPTIONS ARE APPLICABLE OR NOT. IN SMT. M ADHU BAI LODHAS CASE (SUPRA) THE M.P. HIGH COURT TOOK THE VIEW THAT IN A CASE WHICH FALLS WITHIN THE EXCEPTED CATEGORY, IT WOULD ALWAYS BE OPEN TO THE DEPARTMENT TO BRING IT TO THE NOTICE OF THE FORUM A PPROACHED AND TO INSIST THAT THE QUESTION BEING COVERED BY THE EXCEP TIONS CONTAINED IN THE CIRCULAR, THE SAME DESERVES TO BE CONSIDERED. ITA NO.127/AHD/2008 (ASSTT.YEAR:- 2003-2004) 6 IN A RAJENDRA PRASAD &ORS., CASE (SUPRA), THE AP. H IGH COURT TOOK THE VIEW THAT IN CASE THE DEPARTMENT FINDS A CERTAIN MA TTER TO BE AGITATED BY WAY OF AN APPEAL ALTHOUGH IT FALLS WITHIN THE MONET ARY LIMITS OF THE CIRCULARS, THE DEPARTMENT SHOULD CLEARLY PLEAD IN T HE MEMO OF APPEAL ITSELF THAT THE APPEAL FAILS UNDER THE EXCEPTIONS. IN ABSENCE OF SUCH A PLEADING IN THE MEMO OF APPEAL, NORMALLY APPEAL SHO ULD NOT BE ENTERTAINED. IN KURIAN ABRAHAM PVT LTDS CASE (SUPRA) THE HONBL E SUPREME COURT TOOK THE VIEW THAT WHENEVER ANY BINDING CIRCULAR IS ISSUED BY THE BOARD GRANTING ADMINISTRATIVE RELIEF, AS LONG AS SUCH CIR CULAR REMAINS IN FORCE, IT IS NOT OPEN TO THE SUBORDINATE OFFICERS TO CONTE ND THAT THE CIRCULAR IS ERRONEOUS AND NOT BINDING ON THEM. IF SUCH A CONTEN TION IS TO BE ACCEPTED, FT WOULD LEAD TO CHAOS AND INDISCIPLINE I N THE ADMINISTRATION OF TAX LAWS. IN INDIAN OIL CORPORATION CASE (SUPRA) THE HONBLE SUPREME COURT LAID DOWN CERTAIN PROPOSITIONS OF LAW IN RELATION TO THE BINDING NATURE OF CIRCULARS ISSUED BY THE BOARD. THE COURT HELD THAT DESPITE THE DECISION OF THIS COURT, THE DEPARTMENT CANNOT BE PERMITTED TO T AKE A STAND CONTRARY TO THE INSTRUCTIONS ISSUED BY THE BOARD AND THAT IT IS NOT OPEN TO THE REVENUE TO ADVANCE AN ARGUMENT OR FILE AN APPEAL CO NTRARY TO THE CIRCULARS. 20. THERE IS ALSO DIFFERENCE OF OPINION AMONGST TH E COURTS WITH REGARD TO THE APPLICABILITY OF THE CIRCULAR. IF, ON THE DATE OF FILING OF AN APPEAL, A CIRCULAR IS NOT IN FORCE OR CERTAIN EXCEP TIONS ARE NOT THERE OR MONETARY LIMIT IS LESS THAN WHAT WAS THERE AT THE T IME OF DECIDING THIS APPEAL, IN SUCH CASES, THE TRIBUNAL WILL HAVE TO GI VE DUE WEIGHTAGE TO THE PROVISIONS CONTAINED IN THE CIRCULAR PREVALENT ON THE DATE OF FILING OF APPEAL AND NOT ON THE DATE OF THE DECISION OF THE A PPEAL. IN CHHAGAR PACKAGING & PLASTICS (P) LTD.S CASE (SUPRA) THE BO MBAY HIGH COURT TOOK THE VIEW THAT CIRCULARS / INSTRUCTIONS ISSUED BY THE BOARD ARE APPLICABLE ONLY PROSPECTIVELY AND IF THERE IS NO RE FERENCE TO THEIR APPLICABILITY TO THE PENDING MATTERS, SUCH PENDING MATTERS CANNOT BE DECIDED ON THE BASIS OF CIRCULARS/INSTRUCTIONS. IN PITHWA ENGINEERING WORKS CASE (SUPRA) THE BOMBA Y HIGH COURT TOOK THE VIEW THAT TAKING JUDICIAL NOTICE OF THE MO NEY VALUE HAVING GONE DAWN AND COST OF LITIGATION EXPENSES HAVING GONE UP AS WELL AS HUGE PENDENCY OF CASES, THE BOARD SHOULD EVOLVE A POLICY OF APP1YING THE CIRCULARS EVEN TO THE OLD REFERENCES WHICH ARE STIL L V UNDIVIDED. THE DEPARTMENT SHOULD NOT HAVE PROCEEDED WITH THE APPEA LS / REFERENCES WHEREIN THE TAX IMPACT IS MINIMAL, IRRESPECTIVE OF THEIR DATE OFF FILING. ITA NO.127/AHD/2008 (ASSTT.YEAR:- 2003-2004) 7 21. THERE IS NO DISPUTE ABOUT THE FACT THAT WHERE S UBSTANTIAL QUESTION OF LAW OF IMPORTANCE IS INVOLVED OR WHERE QUESTION OF LAW IS REPEATEDLY ARISING OR WHERE THE ISSUE IS COVERED BY THE JUDGME NT OF TERRITORIAL HIGH COURT OR SUPREME COURT, THE TRIBUNAL WILL HAVE TO D ECIDE THE APPEAL ON MERITS AND IN TERMS OF THE LAW DECLARED BY THE SUPR EME COURT OR BY THE TERRITORIAL HIGH COURT. HOWEVER, ON THIS GROUND THE MATTERS CANNOT BE REMANDED TO THE TRIBUNAL DIRECTING THE TRIBUNAL TO DECIDE THE SAME AFRESH. IF NO OBJECTIONS ARE RAISED BY THE DEPARTME NTAL REPRESENTATIVE AT THE TIME OF HEARING OF THE APPEAL AGAINST THE APPLI CABILITY OF THE CIRCULAR DESPITE THERE BEING AN EXCEPTION, THE DEPARTMENT HA S MISSED THE BUS AND SECOND INNING CANNOT BE GRANTED FAR THAT PURPOSE. H OWEVER, IN MATTERS WHERE SUCH OBJECTIONS ARE RAISED AND DESPITE THOSE OBJECTIONS OR WITHOUT DEALING WITH THOSE OBJECTIONS IF THE TRIBUNAL HAS D ISMISSED THE APPEAL ONLY ON THE GROUND OF LOW TAX EFFECT, IN SUCH MATTE R, AN INDULGENCE IS REQUIRED TO BE SHOWN BY THIS COURT AND FOR THIS LIM ITED PURPOSE, THE DEPARTMENT IS PERMITTED TO MOVE AN APPROPRIATE APPL ICATION BEFORE THE TRIBUNAL FOR DECIDING THE APPEAL ON MERITS. 22. WE ARE OF THE VIEW THAT SIMPLY BECAUSE THE APP EAL IS FLIED B THE DEPARTMENT IN CONTRAVENTION OF THE CIRCULAR THE TRI BUNAL IS RIOT BOUND TO DECIDE THE. APPEAL ON MERITS. DUE WEIGHTAGE SHOULD INVARIABLY BE GIVEN BY THE TRIBUNAL TO THE CIRCULAR ISSUED BY THE BOARD . EVEN OTHERWISE, THE NEWLY INSERTED PROVISIONS CONTAINED IN SECTION 268A (4) MAKE IT OBLIGATORY FOR THE TRIBUNAL TO CONSIDER SUCH CIRCUL AR. IT IS NOT OPEN FOR THE DEPARTMENT TO CONTEND THAT CIRCULARS ARE INTERN AL MATTERS OF THE DEPARTMENT AND ASSESSEE CANNOT OBJECT TO FILING OF AN APPEAL ON THE BASIS OF SUCH CIRCULAR. IT IS TRUE THAT FILING OF AN APPE AL IS A STATUTORY RIGHT BUT IT CAN CERTAINLY BE REGULATED BY THE BOARD BY ISSUA NCE OF ORDERS, INSTRUCTIONS OR CIRCULARS. THIS WOULD NOT AMOUNT TO TAKING AWAY THE RIGHT OF FILING OF APPEAL OR THAT SUCH RIGHT IS PRO HIBITED BY EXECUTIVE INSTRUCTIONS. SECTION 268A(1) OF THE ACT NOW RECOGN IZES SUCH RIGHT OF THE BOARD TO REGULATE THE FILING OF APPEAL OR APPLI CATION BEFORE THE TRIBUNAL OR THE COURT. IT IS ALSO TRUE THAT WHEN TH E HONBLE SUPREME COURT OR THE TERRITORIAL HIGH COURT HAVE DECLARED T HE LAW ON A QUESTION, IT IS NOT OPEN TO THE TRIBUNAL TO DIRECT THAT THE C IRCULAR ISSUED BY THE BOARD PRESCRIBING THE MONETARY LIMIT SHOULD BE GIVE N EFFECT TO AND NOT THE DECISION OF HONBLE SUPREME COURT OR THE TERRIT ORIAL HIGH. COURT. IT IS, HOWEVER, EQUALLY TRUE THAT THE TRIBUNALS ATTEN TION MUST BE DRAWN BY THE DEPARTMENTAL REPRESENTATIVE TO SUCH DECISION OF THE HONBLE SUPREME COURT OR THE HIGH COURT. AN OBJECTION MUST BE RAISE D BY THE DEPARTMENTAL REPRESENTATIVE. 23. CONSIDERING ALL THE AFORESAID ISSUES WE DISMIS S ALL THESE TA APPEALS RESERVING LIBERTY TO THE DEPARTMENT ONLY ON THOSE CASES TO APPLY TO THE TRIBUNAL TO DECIDE THE APPEAL ON MERITS WHER E THE OBJECTIONS WERE ITA NO.127/AHD/2008 (ASSTT.YEAR:- 2003-2004) 8 RAISED BEFORE THE TRIBUNAL EITHER IN THE APPEAL MEM O OR AT THE TIME OF HEARING OF APPEAL RAISING A SPECIFIC CONTENTION THA T A PARTICULAR APPEAL IS COVERED BY AN EXCEPTION AND DESPITE THIS OBJECTION THE TRIBUNAL HAS NOT DEALT WITH THE SAID CONTENTION AND DISMISSED THE AP PEAL ON THE GROUND OF LOW TAX EFFECT. IT IS EXPECTED FROM THE TRIBUNAL TO CONSIDER THIS BROAD PARAMETERS WHILE APPLYING THE RELEVANT CIRCULAR TO THE FACTS OF THE CASE AT THE TIME OF DECIDING APPEALS. 24. SO FAR AS TAX APPEAL NOS.496, 545, 547, 548, 5 50 AND 704 OF 2007 ARE CONCERNED, THIS COURT WHILE ADMITTING ALL THESE APPEALS ON 10.10.2007 HAS ALSO FRAMED ONE MARE SUBSTANTIAL QUE STION OF LAW WHICH IS AS UNDER - WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE , THE TRIBUNAL WAS JUSTIFIED IN HOLDING THAT THE EXCISE DUTY LEVIED AN CLOSING STOCK SHOULD NOT BE TAKEN INTO ACCOUNT FOR VALUATION CT THE CLOS ING STOCK? 25. SINCE THE TRIBUNAL HAS DISMISSED ALL THESE APP EALS FILED BY THE DEPARTMENT ONLY ON THE GROUND OF LOW TAX EFFECT AND HAS NOT DECIDED THIS ISSUE ON MERITS NOR THE DEPARTMENTAL REPRESENT ATIVE HAD RAISED ANY OBJECTION ON THIS ISSUE, WE DO NOT GIVE ANY FINDING ON THIS ISSUE. 26. SUBJECT TO THE AFORESAID CLARIFICATION AND OBS ERVATIONS ALL THESE APPEALS ARE ACCORDINGLY DISMISSED WITHOUT ANY ORDER AS TO COSTS. THE FACTS BEING SIMILAR, BY FOLLOWING THE ABOVE DEC ISION OF THE HONBLE JURISDICTIONAL HIGH COURT AS WELL AS THE DECISION O F THE SPECIAL BENCH OF ITAT, WE DISMISS THE APPEAL OF THE REVENUE AS NOT MAINTAI NABLE THE REVENUE EFFECT INVOLVED BEING LESS THAN RS.2 LAKHS. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED AS NOT MAINTAINABLE. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DATED 28 TH AUGUST, 2009. SD/- SD/- (H.L. KARWA) (D.C. AGRAWAL) JUDICIAL MEMBER ACCOUNTA NT MEMBER AHMEDABAD; DATED: 28/08/2009 ANKIT* COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT ITA NO.127/AHD/2008 (ASSTT.YEAR:- 2003-2004) 9 2. THE RESPONDENT 3. THE CIT(A) CONCERNED 4. THE CIT, 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, ASSTT. REGISTRAR/ DEPUTY REGISTRAR ITAT, AHMEDABAD BENCHES, AHMEDABAD.