The ITO, 5(3), Indore V. Shri Dinesh Khandelwal, Indore

ITA 491/IND/2012

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5656 (ITAT-INDORE)
• Duration Of Justice: 4 year(s) 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 19-10-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 03-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHD JAVED
• Keywords: Audit objection; Retrospective amendment; Question of law; Tax effect
• Section: 260A; 12A

Judgement Text

DINESH KHANDELWAL ITA 491/IND/2012 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE .., ..!', #$ # !% BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER I.T.A. NO. 491/IND/2012 ASSESSMENT YEAR: 2008-09 INCOME TAX OFFICER 5(3), INDORE :: APPELLANT VS DINESH KHANDELWAL INDORE ./ PAN: ACBPK 8510G :: RESPONDENT REVENUE BY SHRI MOHD. JAVED ASSESSEE BY SHRI ANIL KAMAL GARG ! ' #$ DATE OF HEARING 19.10.2016 %&'( #$ DATE OF PRONOUNCEMENT 9.11.2016 * O R D E R PER SHRI D.T. GARASIA, JM THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF THE LEARNED CIT(A)-II, INDORE, DATED 29.6.2012. DINESH KHANDELWAL ITA 491/IND/2012 2 2. WE HAVE HEARD BOTH THE SIDES. WE FIND THAT THE CBDT VIDE CIRCULAR NO. 21/20145 ISSUED ON 10.12.2015 HAS REVI SED THE MONETARY LIMIT FOR FILING OF APPEAL BEFORE ITAT FIX ING THE TAX EFFECT LIMIT AT RS.10 LACS. THE SAID CIRCULAR IS REPRODUC ED 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 APPEL LATE TRIBUNAL AND HIGH COURTS AND SLP BEFORE SUPREME COU RT MEASURES 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 TH E MONETARY 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: DINESH KHANDELWAL ITA 491/IND/2012 3 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 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 TH E TAX THAT WOULD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCO ME 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). HOW EVER THE TAX WILL NOT INCLUDE ANY INTEREST THEREON, EXCEPT W HERE CHARGEABILITY OF INTEREST ITSELF IS IN DISPUTE. IN CASE THE CHARGEABILITY OF INTEREST IS THE ISSUE UNDER DISPUT E, THE AMOUNT OF INTEREST SHALL BE THE TAX EFFECT. IN CASE S WHERE RETURNED LOSS IS REDUCED OR ASSESSED AS INCOME, THE TAX EFFECT WOULD INCLUDE NOTIONAL TAX ON DISPUTED ADDIT IONS. IN CASE OF PENALTY ORDERS, THE TAX EFFECT WILL MEAN QU ANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER TO BE AP PEALED 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 S PECIFIED DINESH KHANDELWAL ITA 491/IND/2012 4 IN PARA 3. NO APPEAL SHALL BE FILED IN RESPECT OF A N ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN PARA 3. IN OTH ER 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, E ACH 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 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 I NCOME- TAX DEPARTMENT HAS ACQUIESCED IN THE DECISION ON TH E DISPUTED ISSUES. THE INCOME-TAX DEPARTMENT SHALL NO T BE PRECLUDED FROM FILING AN APPEAL AGAINST THE DISPUTE D ISSUES IN THE CASE OF THE SAME ASSESSEE FOR ANY OTHER ASSE SSMENT YEAR, OR IN THE CASE OF ANY OTHER ASSESSEE FOR THE SAME OR ANY OTHER ASSESSMENT YEAR, IF THE TAX EFFECT EXCEED S THE SPECIFIED MONETARY LIMITS. 7. IN THE PAST, A NUMBER OF INSTANCES HAVE COME TO THE NOTICE OF THE BOARD, WHEREBY AN ASSESSEE HAS CLAIME D 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 ASSESSE E FOR THE SAME OR ANY OTHER ASSESSMENT YEAR, BY NOT FILIN G AN DINESH KHANDELWAL ITA 491/IND/2012 5 APPEAL ON THE SAME DISPUTED ISSUES. THE DEPARTMENTA L REPRESENTATIVES/COUNSELS MUST MAKE EVERY EFFORT TO BRING TO THE NOTICE OF THE TRIBUNAL OR THE COURT THAT THE APPEAL IN SUCH CASES WAS NOT FILED OR NOT ADMITTED ONLY FOR T HE REASON OF THE TAX EFFECT BEING LESS THAN THE SPECIF IED MONETARY LIMIT AND, THEREFORE, NO INFERENCE SHOULD BE DRAWN THAT THE DECISIONS RENDERED THEREIN WERE ACCE PTABLE TO THE DEPARTMENT. ACCORDINGLY, THEY SHOULD IMPRESS UPON THE TRIBUNAL OR THE COURT THAT SUCH CASES DO NOT HA VE ANY 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 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. 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 PROVISION S OF STATUTE & RULES. FURTHER, FILING OF APPEAL IN CASES OF INCOME TAX, WHERE THE TAX EFFECT IS NOT QUANTIFIABLE OR NO T INVOLVED, SUCH AS THE CASE OF REGISTRATION OF TRUSTS OR INSTI TUTIONS UNDER SECTION 12A OF THE IT ACT, 1961, SHALL NOT BE GOVERNED BY THE LIMITS SPECIFIED IN PARA 3 ABOVE AND DECISION TO FILE APPEAL IN SUCH CASES MAY BE T AKEN ON MERITS OF A PARTICULAR CASE. DINESH KHANDELWAL ITA 491/IND/2012 6 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 INSTRUCTIONS ON THIS SUBJECT, OPERATIVE AT THE TIME WHEN SUCH APPEAL 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 MONETARY LIMIT FOR FILING OF APPEALS BEFORE THE ITAT, THEREFORE, THE PRESENT APP EAL DESERVES TO BE DISMISSED IN LIMINE BEING NOT MAINTAINABLE IN VIEW OF ABOVE CIRCULAR NO. 21/20145 DATED 10.12.2015. 4. WE FURTHER FIND THAT HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS M/S. P. S. JAIN & CO. IN ITA NO.179/1991 DA TED 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 T HE FILE OF THE DEPARTMENTS HAVE BEEN INCREASED CONSEQUENTLY, THE B URDEN ON THE DEPARTMENT HAS ALSO INCREASED TO A TREMENDOUS E XTENT. THE CORRIDORS OF THE SUPERIOR COURTS ARE CHOCKED WI TH 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 DINESH KHANDELWAL ITA 491/IND/2012 7 LESS THAN RS. 2 LAKHS. THE SAME POLICY FOR OLD MAT TERS NEEDS TO BE ADOPTED BY THE DEPARTMENT. IN OUR VIEW, THE BOA RDS CIRCULAR DATED MARCH 27, 2000 IS VERY MUCH APPLICAB LE EVEN TO THE OLD REFERENCES WHICH ARE STILL UNDECIDED. THE DEPARTMENT IS NOT JUSTIFIED IN PROCEEDING WITH THE OLD REFEREN CES WHEREIN THE TAX IMPACT IS MINIMAL. THUS, THERE IS NO JUSTI FICATION TO PROCEEDS WITH DECADES OLD REFERENCES HAVING NEGLIGI BLE TAX EFFECT. SIMILARLY, HONBLE GUJARAT HIGH COURT IN THE CASE O F CIT V. SURESHCHANDRA DURGAPRASAD KHATOD (HUF) (2012) 253 C TR 492 (GUJ) 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 FILED ON OR AFTER FEBRUARY, 2011. HONBLE 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. KAVEKA R DECIDED ON 29.7.2011. THE DIVISION BENCH, AFTER CONSIDERING EA RLIER INSTRUCTIONS AND VARIOUS DECISIONS OF THE COURTS ON INSTRUCTIONS, RELYING ON THE DECISION IN COMMISSIONER OF INCOME T AX 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: '9. AS STATED EARLIER, THE INCOME TAX ACT WAS AMEND ED AND SECTION 268A HAS BEEN INTRODUCED ON THE STATUTE BOO K WITH DINESH KHANDELWAL ITA 491/IND/2012 8 RETROSPECTIVE EFFECT. SECTION 268A CARVES OUT AN EX CEPTION FOR FILING OF APPEALS AND REFERENCES UNDER SECTION 260 A OF TH E ACT. THE LEGISLATURE HAS PRESCRIBED THAT THE CBDT IS EMPOWER ED TO ISSUE CIRCULARS AND INSTRUCTIONS FROM TIME TO TIME, WITH REGARD TO FILING 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 APP EALS WERE TO BE FILED UNDER SECTION 260A, THEREAFTER, ONLY IN CA SES WHERE THE TAX EFFECT EXCEEDED RS. 4 LACS. PARAGRAPH 11 OF THA T INSTRUCTION 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 T HE ISSUANCE OF INSTRUCTION AND WHERE SUBSTANTIAL QUESTIONS OF LAW WERE RAISED, WERE REQUIRED TO BE DECIDED ON MERITS. THE COURT, W HILE CONSIDERING THE ISSUE OBSERVED THAT PARAGRAPH 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 OBSERVED AS FOLLOWS: DINESH KHANDELWAL ITA 491/IND/2012 9 '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 INVOLVED, EVEN THEN T HE DEPARTMENT 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 FIXE D BY THE CBDT.' 7. ONE FAILS TO UNDERSTAND HOW THE REVENUE, ON THE FACE OF THE ABOVE CLEAR INSTRUCTIONS OF THE CBDT, CAN CONTEND THAT TH E 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 GO OD EVEN FOR PENDING CASES. ACCORDINGLY, 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 9 TH FEBRUARY, 2011, BEING INSTRUCTION NO. 3 OF 2011. THE MONETARY LIMIT HAS BEEN RAISED AGAIN AND CLAUSE 3 OF THE INSTRUCTIONS PROVI DES THAT APPEALS SHALL NOT BE FILED IN CASES WHERE THE TAX E FFECT DOES NOT EXCEED THE MONETARY LIMITS PRESCRIBED, HENCEFORTH. THE MONETARY LIMITS PRESCRIBED FOR FILING AN APPEAL UNDER SECTIO N 260A BEFORE THE HIGH COURT HAS BEEN RAISED TO RS. 10 LACS. THIS INSTRUCTION IS DINESH KHANDELWAL ITA 491/IND/2012 10 IDENTICAL TO THE CBDT INSTRUCTION NO. 5 OF 2008. CL AUSE 10 OF THIS CIRCULAR INDICATES THAT MONETARY LIMITS WOULD NOT A PPLY TO WRIT MATTERS AND DIRECT TAX MATTERS OTHER THAN INCOME TA X. IT FURTHER PROVIDES THAT WHERE THE TAX EFFECT IS NOT QUANTIFIA BLE, THE DEPARTMENT SHOULD TAKE A DECISION TO FILE APPEALS O N MERITS OF EACH CASE. CLAUSE 11, AGAIN PROVIDES THAT THE INSTR UCTION WOULD APPLY TO APPEALS FILED ON OR AFTER ....2011 AND APP EALS FILED BEFORE ...... 2011 WOULD BE GOVERNED BY THE INSTRUCTIONS O N 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. MADHUKA RINAMDAR (SUPRA), THE SAME PRINCIPLES MUST APPLY IN THE PRES ENT 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 MA RCH 03, 2011, BY RELYING ON ITS EARLIER JUDGEMENT 'COMMISSI ONER 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 MO NETARY LIMIT OF THE TAX EFFECT TO RS. 10 LACS WOULD BE APPLICABLE T O 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 CORP ORATION (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. T HE MAIN OBJECTIVE OF SUCH INSTRUCTIONS IS TO REDUCE THE PEN DING LITIGATION WHERE THE TAX EFFECT IS CONSIDERABLY SMALL. THEREFO RE, IN OUR OPINION, THE TAX APPEALS ARE REQUIRED TO BE DISMISS ED, AS THEY ARE DINESH KHANDELWAL ITA 491/IND/2012 11 NOT MAINTAINABLE IN VIEW OF THE PROVISIONS OF SECTI ON 268A OF THE INCOME TAX, AND THE 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 DIVIS ION BENCH HAS CONSIDERED INSTRUCTION NO.3 AND THE NATIONAL LI TIGATION, 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 L IMIT, WITHOUT EXPRESSING ANY OPINION ON THE MERITS OF THE CLAIM, MAKING IT CLEAR THAT THE DEPARTMENT IS AT LIBERTY TO PROCEED AGAINS T THE ASSESSEE IN FUTURE, IF THERE ANY AMOUNT DUE FROM THE ASSESSE E, ON SIMILAR ISSUE AND IF IT IS ABOVE THE MONETARY LIMIT PRESCRI BED.' 5. WE ALSO FIND FROM THE ABOVE CASE LAW OF HONBLE GUJARAT HIGH COURT IN THE CASE OF SURESH CHANDRA DURGAPRASAD KHA TOD (HUF) ( SUPRA ) THAT IN THE SIMILAR SITUATION, EXACTLY IDENTICAL INSTRUCTIONS WERE APPLIED TO THE APPEALS FILED RETROSPECTIVELY. HONBLE GUJARAT HIGH COURT HAS DISCUSSED THAT ALMOST ALL HIGH COURT S ARE OF THE UNANIMOUS VIEW, CONSIDERING THE MAIN OBJECTIVE OF S UCH 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. 10 LAKHS DINESH KHANDELWAL ITA 491/IND/2012 12 FOR FILING APPEAL BEFORE ITAT ON INCOME TAX MATTERS , AS ISSUED VIDE THE ABOVE CIRCULAR WILL APPLY TO PENDING APPEALS AL SO FOR THE REASON THAT THE SAME IS EXACTLY IDENTICAL TO EARLIER INSTR UCTIONS. 6. IN VIEW OF THE ABOVE DISCUSSION AND THE LATEST C IRCULAR ISSUED BY THE CBDT, AS REPRODUCED ABOVE, SINCE THE TAX EFF ECT INVOLVED IN THE PRESENT APPEAL IS BELOW THE MONETARY LIMIT, THE REFORE, WE DISMISS THIS DEPARTMENTAL APPEAL IN LIMINE BEING NOT MAINTAINABLE. 7. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED, BEING NOT MAINTAINABLE. THE ORDER HAS BEEN PRONOUNCED IN OPEN COURT ON 9 TH NOVEMBER, 2016. SD SD ( ..!') (..) #$ (O.P.MEENA) (D.T.GARASIA) ACCOUNTANT MEMBER J UDICIAL MEMBER )'* / DATED : 9 TH NOVEM BER, 2016. DN/ DINESH KHANDELWAL ITA 491/IND/2012 13