DCIT, Varanasi V. M/sA.N.G.Education Charitable Society, Varanasi

ITA 342/ALLD/2012

• Counselvise Citation: 34220714 RSA 2012
• Duration Of Justice: 2 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 10-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K SINGH
• Keywords: Audit objection; Retrospective amendment; Question of law; Tax effect
• Section: 260A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ALLAHABAD BENCH ALLAHABAD BEFORE SHRI P.K. BANSAL , ACCOUNTANT MEMBER I.T.A. NO. 342 / ALLD/201 2 ASSESSMENT YEAR: 2009 - 10 DY.CIT, CIRCLE - 3, VS. M/S. A.N.G. EDUCATION VARANASI. CHARITABLE SOCIETY, SOCIETY, S - 29/429A - 2, MEHTA NAGAR COLONY, VARANASI PAN: AACTA 3115A (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI A.K. SINGH , DR. DATE OF HEARING: 03. 08.2015 ORDER PER : P.K. BANSAL , A CCOUNTANT MEMBER THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) , VARANASI DATED 12 . 0 6 .2012 FOR THE ASSESSMENT YEAR 200 9 - 10 . 2. SHRI A.K. SINGH, DR, REPRESENTED ON BEHALF OF THE REVENUE AND NONE PRESENT ON BEHALF OF THE ASSESSEE. 3. AT THE OUTSET, IT WAS FOUND THAT TAX EFFECT IN APPEAL OF REVENUE IS BELOW THE PRESCRIBED MONETARY LIMIT FOR FILING OF APPEAL 2 BEFORE ITAT. THE APPEAL RELATE S TO A.Y. 200 9 - 10 AND FILED BEFORE THE TRIBUNAL ON 10.09. 2012 AND IN VIEW OF THE RECENT INSTRUCTION NO.5/2014 ISSUED BY CBDT ON 10.7.2014 REVISING MONETARY LIMIT FOR FILING OF APPEAL BEFORE ITAT FIXING THE TAX EFFECT LIMIT OF RS.4 LACS, THE SAME IS NOT MAINTAINABLE AND LIABLE TO BE DISMISSED IN LIMINE. THE ONLY ISSUE NOW REMAINS BEFORE US IS, WHETHER, THIS APPEAL OF REVENUE, WHICH IS BELOW THE 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. D.R. DRAWN OUR ATTENTION 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 STATED THAT THIS INSTRUCTION IS PROSP ECTIVE AND NOT RETROSPECTIVE. 4. H EARD LD. DR. AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. AT THE OUTSET, IT IS SEEN THAT HON'BLE 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 UN DER: 'THIS COURT CAN VERY WELL TAKE JUDICIAL NOTICE OF THE 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 DEPARTMENT HAS ALSO INCREASED TO A TREMENDOUS EXTENT. THE CORRIDORS OF THE SUPERIOR COURTS 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 3 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 BOARD'S CIRCULAR DATED MARCH 27, 2000 IS VERY MUCH APPLICABLE EVEN TO THE OLD REFERENCES WHICH ARE STILL UNDECIDED. THE DEPARTMENT IS NOT JUSTIFIED IN PROCEEDIN G WITH THE OLD REFERENCES WHEREIN THE TAX IMPACT IS MINIMAL. THUS, THERE IS NO JUSTIFICATION TO PROCEEDS WITH DECADES OLD REFERENCES HAVING NEGLIGIBLE TAX EFFECT.' SIMILARLY, HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT V. SURESHCHANDRA DURGAPRASAD KHATO D (HUP) (2012) 253 CTR 492 (GUJJ 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 CONDITION IN THAT INSTRUCTION ALSO THAT THE SAME WOULD APPLY TO APPEALS FILE ON OR AFTER FEBRUARY, 2011. HON'BLE 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 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, AFTERCONSIDERING EARLIER INSTRUCTIONS AND VARIOUS DECISIONS OF THE COURTS ON INSTRUCTIONS, RELYING ON THE DECISION IN COMMISSIONER OF INCOME TAX VS. MADHUK AR K. INAMDAR (HUF) REPORTED IN (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 UNDER SECTION 260 A OF THE ACT. THE LEGISLATURE HAS PRESCRIBED THAT THE CBDT IS EMPOWERED TO ISSUE CIRCULARS AND INSTRUCTIONS FROM TIME TO TIME, WITH REGARD TO FILING OF APPEALS DEPENDING ON THE TAX EFFECT INVOLVED. 4 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 AFORES AID 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, ONLY IN CASES WHERE THE TAX EFFECT EXCEEDED RS. 4 LACS. PAR AGRAPH 11 OF THAT INSTRUCTION STIPULATED THAT IT WAS APPLICABLE TO APPEALS FILED ON OR AFTER 15TH MAY, 2008. IT WAS FURTHER PROVIDED THAT IN CASES, WHERE APPEALS WERE FILED BEFORE 15TH MAY, 2008, THEY WOULD BE GOVERNED BY THE INSTRUCTIONS ON THIS SUBJECT W HICH WERE OPERATIVE AT 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 CONTINUING WITH THE APPEALS AND/OR PETITIONS FILED PRIOR TO 15TH 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 APPEALS 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 THAT PARAG RAPH 5 OF THE CIRCULAR MADE IT CLEAR THAT NO APPEALS WOULD BE FILED IN THE CASES INVOLVING TAX EFFECT LESS THAN RS. 4 LACS NOTWITHSTANDING THE ISSUE BEING OF RECURRING NATURE. RELYING ON THE JUDGEMENT IN CIT V/S POLYCOTT CORPORATION, THE COURT OB SERVED AS FOLLOWS: '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 SAME ISSUE, IN RESPECT OF SAME ASSESSEE, FOR OTHER ASSESSMENT YEARS IS INVOLVE D, EVEN THEN THE DEPARTMENT SHOULD NOT FILE APPEAL, IF THE TAX EFFECT IS LESS THAN RS. 4 LAKHS. IN OTHER 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 LE SS THAN THE MONETARY LIMIT FIXED BY THE CBDT.' . 5 7. ONE FAILS TO UNDERSTAND HOW THE REVENUE, ON THE FACE OF 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 AFTE R 15TH MAY, 2008 AND IN COMPLIANCE THEREOF, 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 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 INSTRUCTIONS FIXING THE MONETARY LIMIT FOR THE TAX EFFECT WOULD HOLD GOOD EVEN FOR PENDING CASES. ACCORDIN GLY, THE COURT DISMISSED ALL THE APPEALS HAVING A TAX EFFECT OF LESS THAN RS. 4 LACS. 10. THE NEW CBDT 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 INSTR UCTIONS PROVIDES THAT APPEALS SHALL NOT BE FILED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS PRESCRIBED, HENCEFORTH. THE MONETARY LIMITS PRESCRIBED FOR FILING AN APPEAL UNDER SECTION 260A BEFORE THE HIGH COURT HAS BEEN RAISED TO RS. 1 0 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 FURTHER PROVIDES THAT WHERE THE TAX EFFE CT IS NOT QUANTIFIABLE, THE DEPARTMENT SHOULD TAKE A DECISION TO FILE APPEALS ON MERITS OF EACH CASE. 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, 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 INAMDAR (SUPRA), THE SAME PRINCIPLES MUST APPLY I N 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.', DECID ED ON MARCH 03, 2011, BY RELYING ON ITS EARLIER JUDGEMENT 'COMMISSIONER INCOME TAX DELHI - 6 ILL V/S M/S P.S. JAIN AND CO. DECIDED ON 2ND AUGUST, 2010 HAS HELD THAT THE CBDT CIRCULAR RAISING THE MONETARY LIMIT OF THE TAX EFFECT TO RS. 10 LACS WOULD BE APPLICAB LE TO PENDING CASES ALSO. 17. IT IS TRUE THAT THIS JUDGEMENT IN CHHAJER'S CASE (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 CASES AS WELL. 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 NOT MAINTAINABLE IN VIEW OF THE PROVISIONS OF SECTION 268A OF THE INCOME TAX, AND THE CBDT INSTR UCTION NO, 3 OF 2011.' 7. THE SAME VIEW HAS BEEN TAKEN BY THE KARNATAKA HIGH 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 CONSIDERED INSTRUCTION NO.3 AND THE NA TIONAL LITIGATION, 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 GROUND OF MONETARY LIMIT, WITHOUT EXPR ESSING 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 THE ASSESSEE, ON SIMILAR ISSUE AND IF IT IS ABOVE THE MONETARY LIMIT PRESCRIBED.' 5. F IND FROM THE ABOVE CASE LAW OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF SURESHCHANDRA DURGAPRASAD KHATOD (HUF), (SUPRA) THAT IN THE SIMILAR SITUATION AND EXACTLY IDENTICAL INSTRUCTIONS WERE APPLIED TO THE APPEAL FILED RETROSPECTIVELY. HON'BLEGUJARAT HIGH COURT HAS DISCUSSED THAT ALMOST ALL HIGH COURTS ARE OF THE UNANIMOUS VIEW, CONSIDERING THE MAIN OBJECTIVE OF SUCH 7 INSTRUCTIONS THAT TO REDUCE THE PENDING LITIGATION, WHERE THE TAX EFFECT IS CONSIDERABLE LOW OR SMALL, THE APPEAL IS NOT MAINTAINABLE. THE REC ENT INSTRUCTION REVISING THE MONETARY LIMIT TO RS. 4 LAKH FOR FILING APPEAL BEFORE 1TAT ON INCOME TAX MATTERS, AS ISSUED VIDE INSTRUCTION NO.5/2014 FNO279/MISC.L42/2007 - ITJ(PT) DATED 10 TH JULY, 2014 WILL APPLY TO PENDING APPEALS ALSO FOR THE REASON THAT TH E SAME IS EXACTLY IDENTICAL TO EARLIER INSTRUCTIONS. THE RELEVANT CIRCULAR ISSUED BY CBDT READS AS UNDER: 'REFERENCE IS INVITED TO BOARD'S INSTRUCTION NO 3/2011 DOTED 09/02/2011 WHEREIN MONETARY LIMITS AND OTHER CONDITIONS FOR FILING 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, HIG H 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/ - 8 IT IS CLARIFIED THAT AN APPEAL SHOULD NOT BE FILED MERELY BECAUSE THE TAX EFFECT IN A CASE EXCEEDS THE MONETARY 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 DIFFERENCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND THE TAX THAT WOULD HAVE BEEN CHARG EABLE 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 CHARG EABILITY 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 EFFECT. IN CASES WHERE RETURNED LOSS IS REDUCED OR ASSESSED AS INCOME, THE TAX EFFECT WOULD INCLUDE NOTIONAL TAX ON 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 EFFECT SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESP ECT OF THE DISPUTED ISSUES IN THE CASE OF EVERY ASSESSEE. IF IN THE CASE OF AN ASSESSEE, THE DISPUTED ISSUES ARISE IN MORE THAN ONE ASSESSMENT YEAR, APPEAL CAN BE FILED IN RESPECT OF SUCH ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IN RESPECT OF THE D ISPUTED ISSUES EXCEEDS 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 SPECIFIED IN PARA 3. IN OTHER WORDS, HENCEFORTH, APPEALS CAN BE FILED ONLY WITH REFERENCE 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 S HALL BE FILED IN RESPECT OF ALL SUCH ASSESSMENT YEARS EVEN IF THE 'TAX EFFECT' IS L ESS 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 MONETARY LIMIT PR ESCRIBED. 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 COURT IS NOT FILED ONLY ON ACCOUNT OF THE TAX EFFECT BEING LESS THAN THE M ONETARY LIMIT SPECIFIED ABOVE, THE COMMISSIONER OF INCOME - TAX SHALL SPECIFICALLY RECORD THAT 'EVEN THOUGH THE DECISION IS NOT ACCEPTABLE, APPEAL IS NOT 9 BEING FILED ONLY ON THE CONSIDERATION THAT THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN T HIS 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 FILING AN APPEAL AGAINST THE DISPUTED ISSUES IN THE CASE OF THE SAME ASSESSEE FOR ANY OTHER ASSESSMENT 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 THE 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 THE 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 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 MONETARY LIMIT AND, THEREFORE, NO INFERENCE SHOULD BE DRAWN THAT THE DECISIONS RENDERED THEREIN WERE ACCEPTABLE TO THE DEPARTMENT. ACCORDINGLY, TH EY 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 INSTRUCTION MAY HAVE TO BE PRODUCED IN COURTS, THE JUDICIAL FOLDERS IN THE OFFICE OF CSLT MUST BE MAINTAINE D IN A SYSTEMIC MANNER FOR EASY RETRIEVAL. 8. ADVERSE JUDGMENTS RELATING TO THE FOLLOWING ISSUES 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 EFFEC T. (A) WHERE THE CONSTITUTIONAL VALIDITY OF THE PROVISIONS OF AN ACT OR RULE ARE UNDER CHALLENGE, OR (B) WHERE HOARD'S ORDER, NOTIFICATION, INSTRUCTION OR CIRCULAR HAS BEEN HELD TO BE ILLEGAL OR ULTRA VIRES, OR (C) WHERE REVENUE AUDIT OBJECTION IN THE C ASE HAS BEEN ACCEPTED BY THE DEPARTMENT. 10 9. THE PROPOSAL FOR FILING SPECIAL LEAVE PETITION UNDER 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 WITH THE MINISTRY OF LAW AND JUSTICE . 10. THE MONETARY LIMITS SPECIFIED IN PARA 3 ABOVE SHALL NOT APPLY TO WRIT MATTERS AND DIRECT TAX MATTERS OTHER THAN INCOME TAX. FILING OF APPEALS IN OTH ER DIRECT TAX * MATTERS SHALL CONTINUE TO BE GOVERNED BY THE RELEVANT PROVISIONS 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 TRUSTS OR IN STITUTIONS UNDER SECTION 12 A OF THE IT ACT, 1961, SHALL NOT BE GOVERNED BY THE LIMITS 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 AF TER 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 AC T 1961.' 6. ON QUERY FROM THE BENCH, THE LD. DR COULD NOT POINT 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 ACCOU NT, (B) THAI: 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 ACTOR IT. RULES 1962 ARE UNDER CHALLENGE, (D) THAT BOARD'S 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. 11 THE LD. DR COULD NOT POINT OUT ANY OF THE EXCEPTIONS AS PROVIDED ABOVE. ACCORDINGLY, THIS BEING A LOW TAX EFFECT CASE, I DISMISS THE APPEAL OF THE REVENUE IN LIMINE WITHOUT GOING INTO MERITS. 7. IN THE RE SULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONO UNCED IN THE OPEN COURT ON 3 / 8 / 2015 SD/ - ( P.K. BANSAL ) ACCOUNTANT MEMBER DATED: 3 / 8 /201 5 PRABHAT KUMAR KESARWANI, SR.P.S. COPY FORWARDED TO: 1. APPELLANT 2. RESP ONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR