The ITO, 1(1), Bhopal V. M/s. Vardhman Builders & Developers, Bhopal

ITA 222/IND/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0403 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2003-2004
• Appeal Filed On: 21-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: PRADEEP GUPTA
• Keywords: Audit objection; Retrospective amendment; Question of law; Tax effect
• Section: 260A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, J.M. AND SHRI B.C.MEENA, A.M. I.T.A.NO.222/IND/2014 A.Y. : 2003-04 I.T.O., 1(1), BHOPAL VS. M/S.VARDHMAN BUILDERS & DEVELOPERS, 130, MALVIYA NAGAR, BHOPAL APPELLANT RESPONDENT PAN NO. AADFV4677P APPELLANT BY : SHRI R.A.VERMA, SR. DR RESPONDENT BY : SHRI PRADEEP GUPTA, ADV. DATE OF HEARING : 16.07.2015 DATE OF PRONOUNCEMENT : 16.07.2015 -: 2: - 2 O R D E R PER GARASIA, J.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A), BILASPUR, DATED 27.10.2013 FOR THE ASSE SSMENT YEAR 2003-04. 2. THE FOLLOWING GROUND HAS BEEN TAKEN BY THE REVENUE :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF R S. 4,40,450/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DEDUCTION CLAIMED BY THE ASSESSEE U/S 80IB(10) OF T HE INCOME-TAX ACT, 1961. 3. AFTER GOING THROUGH THE GROUND OF APPEAL WE, AT THE OUTSET, POINTED TO THE LD. ARS THAT SINCE THE TAX E FFECT IN THESE APPEAL IS BELOW THE PRESCRIBED MONETARY LIMIT FOR F ILING OF APPEAL BEFORE ITAT THEREFORE THE APPEAL MUST BE DIS MISSED IN VIEW OF INSTRUCTION NO. 5/2014 ISSUED BY CBDT ON 10 .7.2014 REVISING THE MONETARY LIMIT FOR FILING OF APPEAL BE FORE ITAT -: 3: - 3 FIXING THE TAX EFFECT LIMIT OF RS.4 LACS. THE APPE AL IS NOT MAINTAINABLE AND LIABLE TO BE DISMISSED IN LIMINE . THE LD. DR BEFORE US VEHEMENTLY CONTENDED THAT THIS INSTRUCTIO N IS NOT APPLICABLE TO THE APPEAL WHICH HAS BEEN FILED PRIOR TO 10.7.2014. THE ONLY ISSUE NOW REMAINS BEFORE US IS WHETHER THIS APPEAL OF THE REVENUE WHICH IS BELOW THE PRESC RIBED LIMIT OF TAX EFFECT IN VIEW OF THE BOARD INSTRUCTION NO. 5/2014 ISSUED ON 10.7.2014 REVISING THE MONETARY LIMIT 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 A ND ARGUED THAT THIS WILL APPLY TO THE APPEALS FILED ON/AFTER 10.7.2014 AND NOT TO THE APPEAL FILED PRIOR TO 10.7.2014. 4. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH TH E 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: -: 4: - 4 THIS COURT CAN VERY WELL TAKE JUDICIAL NOTICE OF T HE FACT THAT BY PASSAGE OF TIME MONEY VALUE HAS GONE DOWN, THE C OST OF LITIGATION EXPENSES HAS GONE UP, THE ASSESSEES ON T HE FILE OF THE DEPARTMENTS HAVE BEEN INCREASED CONSEQUENTLY, T HE BURDEN ON THE DEPARTMENT HAS ALSO INCREASED TO A TREMENDOUS EXTENT. THE CORRIDORS OF THE SUPERIOR C OURTS ARE CHOCKED WITH HUGE PENDENCY OF CASES. IN THIS VIEW OF THE MATTER, THE BOARD HAS RIGHTLY TAKEN A DECISION NOT TO FILE REFERENCES IF THE TAX EFFECT LESS THAN RS. 2 LAKHS. THE SAME POLICY FOR OLD MATTERS NEEDS TO BE ADOPTED BY THE DEPARTMENT. IN OUR VIEW, THE BOARDS CIRCULAR DATE D MARCH 27, 2000 IS VERY MUCH APPLICABLE EVEN TO THE OLD RE FERENCES WHICH ARE STILL UNDECIDED. THE DEPARTMENT IS NOT J USTIFIED IN PROCEEDING WITH THE OLD REFERENCES WHEREIN THE TAX IMPACT IS MINIMAL. THUS, THERE IS NO JUSTIFICATION TO PROCEE DS WITH DECADES OLD REFERENCES HAVING NEGLIGIBLE TAX EFFECT . 4. SIMILARLY, HONBLE GUJARAT HIGH COURT IN THE CASE O F CIT V. SURESHCHANDRADURGAPRASADKHATOD (HUF) (2012) 253 CTR 492 (GUJ) HAS SPECIFICALLY CONSIDERED INSTRUCTION N O. 3/2011 -: 5: - 5 AND HELD THAT THE SAME WOULD APPLY TO PENDING CASES AS WELL EVEN THOUGH THERE WAS 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 T HIS ISSUE AS UNDER:- 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 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. MADH UKAR K. INAMDAR (HUF) REPORTED IN (2010) 229 CTR (BOM) 7 7, HAS HELD IN PARAGRAPHS 9, 10, 11, 14 AND 17 AS UNDE R: '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 -: 6: - 6 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. PAR AGRAPH 11 OF THAT INSTRUCTION STIPULATED THAT IT WAS APPLI CABLE TO APPEALS FILED ON OR AFTER 15TH MAY, 2008. IT WAS FU RTHER PROVIDED THAT IN CASES, WHERE APPEALS WERE FILED BE FORE 15TH MAY, 2008, THEY WOULD BE GOVERNED BY THE INSTRUCTIONS ON THIS SUBJECT WHICH WERE OPERATIVE A T THE -: 7: - 7 TIME WHEN SUCH APPEALS WERE FILED. THE INSTRUCTION WAS ISSUED UNDER SECTION 268A(1) OF THE ACT. THE ARGUME NT OF THE LEARNED COUNSEL FOR THE REVENUE IN THAT CASE WA S, THAT THE INSTRUCTION ISSUED ON 15TH MAY, 2008 DID NOT PR ECLUDE THE DEPARTMENT FROM CONTINUING WITH THE APPEALS AND /OR PETITIONS FILED PRIOR TO 15TH MAY, 2008, IF THEY IN VOLVED A SUBSTANTIAL QUESTION OF LAW OF A RECURRING NATURE, NOTWITHSTANDING THE FACT THAT THE TOTAL CUMULATIVE TAX EFFECT INVOLVED IN THE APPEALS WAS LESS THAN RS. 4 LACS. IT WAS SUBMITTED, SUCH APPEALS WHICH WERE FILED PRIOR TO THE ISSUANCE OF INSTRUCTION AND WHERE SUBSTANTIAL QUEST IONS OF LAW WERE RAISED, WERE REQUIRED TO BE DECIDED ON MER ITS. THE COURT, WHILE CONSIDERING THE ISSUE OBSERVED THA T PARAGRAPH 5 OF THE CIRCULAR MADE IT CLEAR THAT NO A PPEALS WOULD BE FILED IN THE CASES INVOLVING TAX EFFECT LE SS THAN RS. 4 LACS NOTWITHSTANDING THE ISSUE BEING OF RECUR RING NATURE. RELYING ON THE JUDGEMENT IN CIT V/S POLYCOT T CORPORATION, THE COURT OBSERVED AS FOLLOWS: -: 8: - 8 ' THE AFORESAID JUDICIAL VERDICT MAKES IT CLEAR TH AT THE CIRCULAR DT. 15TH MAY, 2008 IN GENERAL AND PARA (5) THEREOF IN PARTICULAR LAY DOWN THAT EVEN IF THE SAME ISSUE, IN RESPECT OF SAME ASSESSEE, FOR OTHER ASSESSMENT YEAR S IS INVOLVED, EVEN THEN THE DEPARTMENT SHOULD NOT FILE APPEAL, IF THE TAX EFFECT IS LESS THAN RS. 4 LAKHS. IN OTHE R WORDS, EVEN IF THE QUESTION OF LAW IS OF RECURRING NATURE EVEN THEN, THE REVENUE IS NOT EXPECTED TO FILE APPEALS IN SUCH CASES, IF THE TAX IMPACT IS LESS THAN THE MONETARY LIMIT FIXE D BY THE CBDT.' ONE FAILS TO UNDERSTAND HOW THE REVENUE, ON THE FA CE 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.' -: 9: - 9 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 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 -: 10: - 10 APPLY TO APPEALS FILED ON OR AFTER ....2011 AND APP EALS FILED BEFORE ...... 2011 WOULD BE GOVERNED BY THE INSTRUC TIONS ON THIS SUBJECT, OPERATIVE AT THE TIME WHEN SUCH APPEA LS 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 A PPLY IN THE PRESENT CASES ALSO, AS WE HAVE FOUND THAT TH E INSTRUCTIONS OF 15TH MAY, 2008 IS PARA- MATERIAL WI TH 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 PENDIN G CASES ALSO. -: 11: - 11 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 CONSIDERABLY SMA LL. THEREFORE, IN OUR OPINION, THE TAX APPEALS ARE REQU IRED TO BE DISMISSED, AS THEY ARE NOT MAINTAINABLE 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 BENCH HAS CONSIDERE D -: 12: - 12 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 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 SURESHCHANDRA DURGAPRASA D KHATOD (HUF) ( SUPRA ) THAT IN THE SIMILAR SITUATION AND EXACTLY IDENTIC AL INSTRUCTIONS WERE APPLIED TO THE APPEALS FILED RETR OSPECTIVELY. HONBLE GUJARAT HIGH COURT HAS DISCUSSED THAT ALMOS T ALL HIGH COURTS ARE OF THE UNANIMOUS VIEW, CONSIDERING THE M AIN -: 13: - 13 OBJECTIVE OF SUCH INSTRUCTIONS THAT TO REDUCE THE P ENDING LITIGATION, WHERE THE TAX EFFECT IS CONSIDERABLE LO W OR SMALL, THE APPEAL IS NOT MAINTAINABLE. THE RECENT INSTRUCTION REVISING THE MONETARY LIMIT TO RS. 4 LAKH FOR FILING APPEAL BEFO RE ITAT ON INCOME TAX MATTERS, AS ISSUED VIDE INSTRUCTION NO.5 /2014 FNO279/MISC.142/2007-ITJ(PT) DATED 10 TH JULY, 2014 WILL APPLY TO PENDING APPEALS ALSO FOR THE REASON THAT T HE SAME IS EXACTLY IDENTICAL TO EARLIER INSTRUCTIONS. THE RELE VANT 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 DEPARTMENTAL APPEALS (IN INCO ME-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 COU RTS -: 14: - 14 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/- 5. 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. 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 -: 15: - 15 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 -: 16: - 16 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 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 BEING L ESS THAN THE MONETARY LIMIT SPECIFIED ABOVE, THE COMMISSIONE R OF INCOME-TAX SHALL SPECIFICALLY RECORD THAT EVEN THO UGH -: 17: - 17 THE DECISION IS NOT ACCEPTABLE, APPEAL IS NOT BEING FILED ONLY ON THE CONSIDERATION THAT THE TAX EFFECT IS LE SS THAN THE MONETARY LIMIT SPECIFIED IN THIS INSTRUCTION. FURTHER, IN SUCH CASES, THERE WILL BE NO PRESUMPTION THAT TH E INCOME-TAX DEPARTMENT HAS ACQUIESCED IN THE DECISIO N ON THE DISPUTED ISSUES. THE INCOME-TAX DEPARTMENT SHALL NOT BE PRECLUDED FROM FILING AN APPEAL AGAINS T THE DISPUTED ISSUES IN THE CASE OF THE SAME ASSESSEE FO R ANY OTHER ASSESSMENT YEAR, OR IN THE CASE OF ANY OT HER 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 BARD, WHEREBY AN ASSESSEE HAS CLAIMED RELIEF FROM THE TRIBUNAL OR THE COURT ONLY ON THE GROUND T HAT 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 CASE FO R THE SAME OR ANY OTHER ASSESSMENT YEAR, BY NOT FILING AN APPEAL ON THE SAME DISPUTED ISSUES. THE DEPARTMENTA L -: 18: - 18 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 BEING LESS THAN THE SPECIFIED MON ETARY LIMIT AND, THEREFORE, NO INFERENCE SHOULD BE DRAWN THAT THE 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. 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 . (A) WHERE THE CONSTITUTIONAL VALIDITY OF THE PROVIS IONS OF AN ACT OR RULE ARE UNDER CHALLENGE, OR -: 19: - 19 (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 SENT TO THE DIRECTORATE OF INCOME- TAX (LEGAL & RESEARCH), NEW DELHI AND THE DECISION TO FILE SPECIAL LEAVE PETITION SHALL BE IN CONSULTATION WIT H THE MINISTRY OF LAW AND JUSTICE. 10. THE MONETARY LIMITS SPECIFIED IN PARA 3 ABOVE SHALL NOT APPLY TO WRIT MATTERS AND DIRECT TAX MATT ERS OTHER THAN INCOME TAX. FILING OF APPEALS IN OTHER D IRECT TAX MATTERS SHALL CONTINUE TO BE GOVERNED BY THE RELEVANT PROVISIONS OF STATUTE & RULES. FURTHER FIL ING OF APPEAL IN CASES OF INCOME TAX, WHERE THE TAX EFFECT IS NOT QUANTIFIABLE OR NOT INVOLVED, SUCH AS THE CASE OF -: 20: - 20 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. 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 POINT OUT ANY OF THE EXCEPTIONS AS PROVIDED IN THE CIRCULAR AS UNDER: -: 21: - 21 (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 ASSESSM ENT YEARS WHERE TAX EFFECT WILL BE MORE THAN THE PRESCR IBED 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 T HE ACT OR I.T. RULES 1962 ARE UNDER CHALLENGE, (D) THAT BOARDS ORDER, NOTIFICATION, INSTRUCTION O R 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. 6. THE LD. DR COULD NOT POINT OUT ANY OF THE EXCEPTIONS AS PROVIDED ABOVE. ACCORDINGLY, THIS BE ING LOW TAX EFFECT CASE, WE DISMISS THE APPEAL OF THE REVEN UE IN LIMINE WITHOUT GOING INTO MERITS. -: 22: - 22 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 16 TH JULY, 2015. SD/- (B. C. MEENA) ACCOUNTANT MEMBER SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED :16 TH JULY, 2015. CPU*