THE ITO-1(2), Bhopal V. M/s. Modern Builders, Bhopal

ITA 292/IND/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6062 (ITAT-INDORE)
• Duration Of Justice: 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 01-04-2016
• Result in Favour of: Assessee
• 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 (SINGLE MEMBER CASE) BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER I.T.A.NO.292/IND/2016 A.Y. : 2006-07 ITO, M/S.MODERN BUILDERS, 1(2), VS. BHOPAL BHOPAL APPELLANT RESPONDENT PAN NO. AAIFM2412N APPELLANTS BY : SHRI R. A. VERMA, DR RESPONDENT BY : NONE. O R D E R THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(A)-2, BHOPAL, DATED 29.01.2016 RELATING TO A SSESSMENT YEAR 2006-07. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE. DATE OF HEARING : 25.05.2016 DATE OF PRONOUNCEMENT : 25.05.2016 ITO,1(2), BHOPAL VS. M/S. MODERN BUILDERS, BHOPAL I .T.A.NO. 292/IND/2016 A.Y.2006-07 2 2 3. I HAVE HEARD THE LD. DR. I FIND THAT RECENTLY THE C BDT VIDE CIRCULAR NO. 21/20145 ISSUED ON 10.12.2015 HAS REVISED THE MONETARY LIMIT FOR FILING OF APPEAL BEFORE ITAT FIXING THE TAX EFFECT LIMIT AT RS.10 LACS. THE SAID CIRCULAR 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 BEFORE THE SUPREME COURT KEEPING IN VIEW THE MO NETARY LIMITS AND CONDITIONS SPECIFIED BELOW. 3. HENCEFORTH, APPEALS/ SLPS SHALL NOT BE FILED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY L IMITS 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 ITO,1(2), BHOPAL VS. M/S. MODERN BUILDERS, BHOPAL I .T.A.NO. 292/IND/2016 A.Y.2006-07 3 3 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 AG AINST WHICH APPEAL IS INTENDED TO BE FILED (HEREINAFTER R EFERRED TO AS DISPUTED ISSUES). HOWEVER THE TAX WILL NOT INC LUDE 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 T HAN 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, HENCEFORTH, APPEALS CAN BE FILED ONLY WITH REFERENC E TO THE TAX EFFECT IN THE RELEVANT 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 PRESCRIBE D MONETARY LIMITS IN ANY OF THE YEAR(S), IF IT IS DECIDED TO F ILE APPEAL IN RESPECT OF THE YEAR(S) IN WHICH TAX EFFECT EXCEED S THE MONETARY LIMIT PRESCRIBED. IN CASE WHERE A COMPOSIT E ORDER/ JUDGEMENT INVOLVES MORE THAN ONE ASSESSEE, EACH ASS ESSEE SHALL BE DEALT WITH SEPARATELY. 6. IN A CASE WHERE APPEAL BEFORE A TRIBUNA L OR A COURT IS NOT FILED ONLY ON ACCOUNT OF THE TAX EFFECT BEIN G LESS THAN THE MONETARY LIMIT SPECIFIED ABOVE, THE COMMISSIONE R OF ITO,1(2), BHOPAL VS. M/S. MODERN BUILDERS, BHOPAL I .T.A.NO. 292/IND/2016 A.Y.2006-07 4 4 INCOME-TAX SHALL SPECIFICALLY RECORD THAT EVEN THO UGH THE DECISION IS NOT ACCEPTABLE, APPEAL IS NOT BEING FIL ED ONLY ON THE CONSIDERATION THAT THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN THIS INSTRUCTION. FURT HER, 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 PREC LUDED FROM FILING AN APPEAL AGAINST THE DISPUTED ISSUES I N THE CASE OF 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. 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 T HE 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. 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 VIRE S, 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. ITO,1(2), BHOPAL VS. M/S. MODERN BUILDERS, BHOPAL I .T.A.NO. 292/IND/2016 A.Y.2006-07 5 5 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 MON ETARY LIMIT FOR FILING OF APPEALS BEFORE THE ITAT, THEREFORE, T HE PRESENT APPEAL DESERVES TO BE DISMISSED IN LIMINE BEING NOT MAINTAINABLE IN VIEW OF ABOVE CIRCULAR NO. 21/20145 DATED 10.12.2015. 4. I FURTHER FIND THAT HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS M/S. P. S. JAIN & CO. IN ITA NO.179/1991 ITO,1(2), BHOPAL VS. M/S. MODERN BUILDERS, BHOPAL I .T.A.NO. 292/IND/2016 A.Y.2006-07 6 6 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 P OLICY FOR OLD MATTERS NEEDS TO BE ADOPTED B Y THE DEPARTMENT. 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 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 A SPECIFIC CONDITION IN THAT ITO,1(2), BHOPAL VS. M/S. MODERN BUILDERS, BHOPAL I .T.A.NO. 292/IND/2016 A.Y.2006-07 7 7 INSTRUCTION ALSO THAT THE SAME WOULD APPLY TO APPEA LS FILED ON OR AFTER FEBRUARY, 2011. HONBLE HIGH COUR T 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 AMENDED 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 UN DER SECTION 260 A OF THE ACT. THE LEGISLATURE HAS PRESCR IBED 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 ITO,1(2), BHOPAL VS. M/S. MODERN BUILDERS, BHOPAL I .T.A.NO. 292/IND/2016 A.Y.2006-07 8 8 OF ALL EARLIER INSTRUCTIONS ISSUED BY THE BOARD. TH E 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 INSTRUCTION STIPULATED THAT IT WAS APPLICAB LE 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 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 THA T 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 BEING 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 GEN ERAL AND PARA (5) THEREOF IN PARTICULAR LAY DOWN THAT EVEN IF ITO,1(2), BHOPAL VS. M/S. MODERN BUILDERS, BHOPAL I .T.A.NO. 292/IND/2016 A.Y.2006-07 9 9 THE SAME ISSUE, IN RESPECT OF SAME ASSESSEE, FOR OT HER ASSESSMENT YEARS IS INVOLVED, EVEN THEN THE DEPARTMENT SHOULD NOT FILE APPEAL, IF THE TAX EFFEC T IS LESS THAN RS. 4 LAKHS. IN OTHER W ORDS, EVEN IF THE QUESTION OF LAW IS OF RECURRING NATURE EVEN THEN, T HE REVENUE IS NOT EXPECTED TO FILE APPEALS IN SUCH CAS ES, IF THE TAX IMPACT IS LESS THAN THE MONETARY LIMIT FIXE D BY THE CBDT.' 7. ONE FAILS TO UNDERSTAND HOW THE REVENUE, ON THE FACE O F THE ABOVE CLEAR INSTRUCTIONS OF THE CBDT, CAN CONTEND THAT THE CIRCULAR DT. 15TH MAY, 2008 ISSUED BY THE CBDT IS APPLICABLE TO THE CASES FILED AFTER 15T H MAY, 2008 AND IN COMPLIANCE THEREOF, THEY DO NOT FI LE APPEALS, IF THE TAX EFFECT IS LESS THAN RS. 4 LAKHS; BUT THE SAID CIRCULAR IS NOT APPLICABLE TO THE CASES FI LED PRIOR TO 15TH MAY, 2008 I.E. TO THE OLD PENDING APPEALS, EVEN IF THE TAX EFFECT IS LESS THAN RS. 4 LAKHS. IN OUR V IEW, THERE IS NO LOGIC 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 CBD T INSTRUCTIONS HAVE BEEN ISSUED ON 9TH FEBRUARY, 2011, BEING INSTRUCTION NO. 3 OF 2011 . THE MONETARY LIMIT HAS BEEN RAISED AGAIN AND CLAUSE 3 OF THE INSTRUCTIONS PROVIDES THAT APPEALS SHALL NOT BE FILED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MON ETARY LIMITS PRESCRIBED, HENCEFORTH. THE MONETARY LIMITS ITO,1(2), BHOPAL VS. M/S. MODERN BUILDERS, BHOPAL I .T.A.NO. 292/IND/2016 A.Y.2006-07 10 10 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 INSTRUCTI ON NO. 5 OF 2008. CLAUSE 10 OF THIS CIR CULAR INDICATES THAT MONETARY LIMITS WOULD NOT APPLY TO WRIT MATTERS AND DIRECT TAX MATTERS OTHER THAN INCOME TAX. IT FURTHE R PROVIDES THAT WHERE THE TAX EFFECT IS NOT QUANTIFIA BLE, THE DEPARTMENT SHOULD TAKE A DECISION TO FILE APPEA LS ON MERITS OF EACH CA SE. CLAUSE 11, AGAIN PROVIDES THAT THE INSTRUCTION WOULD APPLY TO APPEALS FILED ON OR AFTER ....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 OU R 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 THAT THE INSTRUCTIONS OF 15TH MAY, 2008 IS PARA- MATERIAL 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 MONETAR Y LIMIT OF THE TAX EFFECT TO RS. 10 LACS WOULD BE APPL ICABLE TO PENDING CASES ALSO. ITO,1(2), BHOPAL VS. M/S. MODERN BUILDERS, BHOPAL I .T.A.NO. 292/IND/2016 A.Y.2006-07 11 11 17. IT IS TRUE THAT THIS JUDGEMENT IN CHHAJER'S CASE (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 , THE INSTRUCTION OF 2005 WHICH WAS CONSIDERED IN CHHAJER 'S CASE HAS ALSO BEEN INTERPRETED I N POLYCOT CORPORATION (SUPRA). THE CONSISTENT VIEW OF THE COURT HAS BEEN THAT THE CBDT INSTRUCTION WOULD APPLY TO PENDING CASES A S WE LL. 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 O F 2011.' 7. THE SAME VIEW HAS BEEN TAKEN BY THE KARNATAKA H IGH 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 HA S CONSIDERED INSTRUCTION NO.3 AND THE NATIONAL LITIGA TION, POLICY, 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 ITO,1(2), BHOPAL VS. M/S. MODERN BUILDERS, BHOPAL I .T.A.NO. 292/IND/2016 A.Y.2006-07 12 12 GROUND OF MONETARY LIMIT, WITHOUT EXPRESSING ANY OPINION ON THE MERITS OF THE CLAIM, MAKING IT CLEAR THAT THE DEPARTMENT IS AT LIBERTY TO PROCEED AGAINST THE ASSESSEE IN FUTURE, IF THERE ANY AMOUNT DUE FROM TH E ASSESSEE, ON SIMILAR ISSUE AND IF IT IS ABOVE THE MONETARY LIMIT PRESCRIBED.' 5. I ALSO FIND FROM THE ABOVE CASE LAW OF HONBLE GUJARA T HIGH COURT IN T HE CASE OF SURESH CHANDRA DURGAPRASAD KHATOD (HUF) ( SUPRA ) THAT IN THE SIMILAR SITUATION, EXACTLY IDENTICAL INSTRUCTIONS WERE APPLIED TO THE APPEALS FILED RETROSPECTIVELY. HONBLE GUJARAT HIGH COURT HAS DIS CUSSED THAT ALMOST ALL HIGH COURTS ARE OF THE UNAN IMOUS 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 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 ITO,1(2), BHOPAL VS. M/S. MODERN BUILDERS, BHOPAL I .T.A.NO. 292/IND/2016 A.Y.2006-07 13 13 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, I DISMISS THIS DEPARTMENTAL APPEAL IN LIMINE BEING NOT MAINTAINABLE. 7. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED, BEING NOT MAINTAINABLE. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN C OURT ON 25.05.2016. S D/ - ( D.T.GARASIA) JUDICIAL MEMBER DATED : 25 TH MAY, 2016. ITO,1(2), BHOPAL VS. M/S. MODERN BUILDERS, BHOPAL I .T.A.NO. 292/IND/2016 A.Y.2006-07 14 14 CPU*