THE ACIT-2(1), Bhopal V. SHRI RAJEEV KAPOOR, Bhopal

ITA 612/IND/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5818 (ITAT-INDORE)
• Duration Of Justice: 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2004-2005
• Appeal Filed On: 09-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHD JAVED
• Assessee Lawyers: S S DESH
• Keywords: Audit objection; Question of law; Tax effect
• Section: 260A; 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER ACIT, 2(1), BHOPAL VS. SHRI RAJEEV KAPOOR, E-4/198, ARERA COLONY, BHOPAL PAN: AAABLPP-823B APPELLANT RESPONDENT APPELLANT BY SHRI MOHD.JAVED, SR. DR RESPONDENT BY SHRI S.S.DESHPANDE, C. A. DATE OF HEARING 18.08.2016 DATE OF PRONOUNCEMENT 18.08.2016 O R D E R PER O.P. MEENA, ACCOUTANT MEMEBR. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-2, BHOPAL [HEREINAFTER REFERRED TO AS THE CIT(A)] DATED 31.03 .2016 AND PERTAINS TO ASSESSMENT YEAR 2004-05 AS AGAINST APPE AL DECIDED IN ASSESSMENT ORDER DATED 22.07.2009 OF AC IT, 1(1), BHOPAL [HEREINAFTER REFERRED TO AS THE AO]. I.T.A. NO.612/IND/2016 ASSESSMENT YEAR: 2004-05 ITA NO.612/IND/2016 ACIT VS. RAJEEV KAPOOR, BHOPAL A.Y.2004-05 PAGE 2 OF 11 2 2. WE HAVE HEARD BOTH THE SIDES. WE FIND THAT THE C BDT VIDE CIRCULAR NO.21/2015 ISSUED ON 10.12.2015 HAS R EVISED THE MONETARY LIMIT FOR FILING OF APPEAL BEFORE ITAT FIXING THE TAX EFFECT LIMIT AT RS.10 LACS. THE SAID CIRCULAR IS RE PRODUCED 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 F ILING OF APPEALS BY THE DEPARTMENT BEFORE INCOME TAX APPELLATE TRIBUNAL A ND HIGH COURTS AND SLP BEFORE SUPREME COURT-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 INCOME-TAX MATTERS) BEFORE APPELLATE TRIBUNAL AND HIGH COURTS AND SLP BEFORE T HE 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 T HE SUPREME COURT KEEPING IN VIEW THE MONETARY LIMITS AND CONDI TIONS SPECIFIED BELOW. 3. HENCEFORTH, APPEALS/ SLPS SHALL NOT BE FILED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS GIVEN HE REUNDER: ITA NO.612/IND/2016 ACIT VS. RAJEEV KAPOOR, BHOPAL A.Y.2004-05 PAGE 3 OF 11 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 F ILED MERELY BECAUSE THE TAX EFFECT IN A CASE EXCEEDS THE MONETARY LIMITS PR ESCRIBED 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 THAT WOULD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY TH E AMOUNT OF INCOME IN RESPECT OF THE ISSUES AGAINST WHICH APPEA L IS INTENDED TO BE FILED (HEREINAFTER REFERRED TO AS DISPUTED I SSUES). HOWEVER THE TAX WILL NOT INCLUDE ANY INTEREST THEREON, EXCE PT WHERE 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 CASES WHERE RE TURNED LOSS IS REDUCED OR ASSESSED AS INCOME, THE TAX EFFECT WOULD INCLUDE NOTIONAL TAX ON DISPUTED ADDITIONS. IN CASE OF PENA LTY 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 EF FECT SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESPECT OF THE DISPUTED IS SUES IN THE CASE OF EVERY ASSESSEE. IF, IN THE CASE OF AN ASSES SEE, THE DISPUTED ISSUES ARISE IN MORE THAN ONE ASSESSMENT YEAR, APPE AL, CAN BE FILED IN RESPECT OF SUCH ASSESSMENT YEAR OR YEARS I N WHICH THE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUES EXCEEDS TH E MONETARY LIMIT SPECIFIED IN PARA 3. NO APPEAL SHALL BE FILED IN RE SPECT 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 COM POSITE ORDER OF ANY HIGH COURT OR APPELLATE AUTHORITY, WHICH INVOLV ES MORE THAN ONE ASSESSMENT YEAR AND COMMON ISSUES IN MORE THAN ONE ASSESSMENT YEAR, APPEAL SHALL BE FILED IN RESPECT O F ALL SUCH ITA NO.612/IND/2016 ACIT VS. RAJEEV KAPOOR, BHOPAL A.Y.2004-05 PAGE 4 OF 11 4 ASSESSMENT YEARS EVEN IF THE TAX EFFECT IS LESS T HAN THE PRESCRIBED MONETARY LIMITS IN ANY OF THE YEAR(S), IF IT IS DEC IDED TO FILE APPEAL IN RESPECT OF THE YEAR(S) IN WHICH TAX EFFECT EXC EEDS THE MONETARY LIMIT PRESCRIBED. IN CASE WHERE A COMPOSITE ORDER/ JUDGEMENT INVOLVES MORE THAN ONE ASSESSEE, EACH ASSESSEE SHAL L 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 LESS THAN THE MO NETARY LIMIT SPECIFIED ABOVE, THE COMMISSIONER OF INCOME-TAX SHA LL SPECIFICALLY RECORD THAT EVEN THOUGH THE DECISION IS NOT ACCEPT ABLE, APPEAL IS NOT BEING FILED ONLY ON THE CONSIDERATION THAT THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN THIS INSTRUCTI ON. FURTHER, IN SUCH CASES, THERE WILL BE NO PRESUMPTION THAT THE I NCOME-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 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 ASSESS MENT 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 BOARD, 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 ASSESSEE FOR THE SAME OR ANY OTHER ASS ESSMENT YEAR, BY NOT FILING AN APPEAL ON THE SAME DISPUTED ISSUES . THE DEPARTMENTAL REPRESENTATIVES/COUNSELS MUST MAKE EVE RY EFFORT TO BRING TO THE NOTICE OF THE TRIBUNAL OR THE COURT TH AT THE APPEAL IN SUCH CASES WAS NOT FILED OR NOT ADMITTED ONLY FOR T HE REASON OF THE TAX EFFECT BEING LESS THAN THE SPECIFIED MONETARY L IMIT AND, THEREFORE, NO INFERENCE SHOULD BE DRAWN THAT THE DE CISIONS RENDERED THEREIN WERE ACCEPTABLE TO THE DEPARTMENT. ACCORDINGLY, THEY SHOULD IMPRESS UPON THE TRIBUNAL OR THE COURT THAT SUCH CASES DO NOT HAVE ANY PRECEDENT VALUE. AS THE EVIDE NCE OF NOT FILING APPEAL DUE TO THIS INSTRUCTION MAY HAVE TO B E PRODUCED IN COURTS, THE JUDICIAL FOLDERS IN THE OFFICE OF CSIT MUST BE MAINTAINED 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 ITA NO.612/IND/2016 ACIT VS. RAJEEV KAPOOR, BHOPAL A.Y.2004-05 PAGE 5 OF 11 5 (B) WHERE BOARDS ORDER, NOTIFICATION, INSTRUCTIO N OR CIRCULAR HAS BEEN HELD TO BE ILLEGAL OR ULTRA VIRES, 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 INCO ME TAX. FILING OF APPEALS IN OTHER DIRECT TAX MATTERS SHALL CONTIN UE TO BE GOVERNED BY RELEVANT PROVISIONS OF STATUTE & RULES. FURTHER, FILING OF APPEAL IN CASES OF INCOME TAX, WHERE THE TAX EFF ECT IS NOT QUANTIFIABLE OR NOT INVOLVED, SUCH AS THE CASE OF R EGISTRATION OF TRUSTS OR INSTITUTIONS UNDER SECTION 12A OF THE IT ACT, 1961, SHALL NOT BE GOVERNED BY THE LIMITS SPECIFIED IN PARA 3 A BOVE AND DECISION TO FILE APPEAL IN SUCH CASES MAY BE T AKEN ON MERITS OF A PARTICULAR CASE. 10. THIS INSTRUCTION WILL APPLY RETROSPECTIVELY TO PENDING APPEALS AND APPEALS TO BE FILED HENCEFORTH IN HIGH COURTS/ TRIB UNALS. PENDING APPEALS BELOW THE SPECIFIED TAX LIMITS IN PARA 3 AB OVE MAY BE WITHDRAWN/NOT PRESSED. APPEALS BEFORE THE SUPREME C OURT WILL BE GOVERNED BY THE INSTRUCTIONS ON THIS SUBJECT, OPERA TIVE 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 EFFECT INVOLVED IN THIS APPEAL IS BELOW THE PRESCRIBED MONETARY LIMI T FOR FILING OF APPEALS BEFORE THE ITAT, THEREFORE, THE PRESENT APPEAL DESERVES TO BE DISMISSED IN LIMINE BEING NOT MAINTAINABLE IN VIEW OF ABOVE CIRCULAR NO. 21/2015 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.179/199 1 DATED 02.08.2010 HAS HELD AS UNDER: ITA NO.612/IND/2016 ACIT VS. RAJEEV KAPOOR, BHOPAL A.Y.2004-05 PAGE 6 OF 11 6 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 DEPARTMENT HAS ALSO INCREASED TO A TREMENDOUS EXTENT. THE COR RIDORS OF THE SUPERIOR COURTS ARE CHOCKED WITH HUGE PENDENCY OF C ASES. IN THIS VIEW OF THE MATTER, THE BOARD HAS RIGHTLY TAKEN A D ECISION 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 DEPARTME NT. IN OUR VIEW, THE BOARDS CIRCULAR DATED MARCH 27, 2000 IS VERY MUCH APPLICABLE EVEN TO THE OLD REFERENCES WHICH ARE STI LL UNDECIDED. THE DEPARTMENT IS NOT JUSTIFIED IN PROCEEDING WITH THE OLD REFERENCES WHEREIN THE TAX IMPACT IS MINIMAL. THUS, THERE IS NO JUSTIFICATION TO PROCEEDS WITH DECADES OLD REFERENCES HAVING NEGLIGI BLE TAX EFFECT. SIMILARLY, HONBLE GUJARAT HIGH COURT IN THE CASE O F CIT V. SURESHCHANDRA DURGAPRASADKHATOD (HUF) (2012) 253 CT R 492 (GUJ) HAS SPECIFICALLY CONSIDERED INSTRUCTION N O. 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 9TH FEBRUARY, 2011. HONBLE HIGH COURT HAS CONSIDERED T HIS 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 INSTRUCTI ONS AND VARIOUS DECISIONS OF THE COURTS ON INSTRUCTIONS, RELYING ON THE DECISION IN COMMISSIONER OF INCOME TAX VS. MADHUKAR K. INAMDAR (HUF) REPORTED ITA NO.612/IND/2016 ACIT VS. RAJEEV KAPOOR, BHOPAL A.Y.2004-05 PAGE 7 OF 11 7 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 AMEND ED AND SECTION 268A HAS BEEN INTRODUCED ON THE STATUTE BOOK WITH R ETROSPECTIVE EFFECT. SECTION 268A CARVES OUT AN EXCEPTION FOR FI LING OF APPEALS AND REFERENCES UNDER SECTION 260 A OF THE ACT. THE LEGI SLATURE HAS PRESCRIBED THAT THE CBDT IS EMPOWERED TO ISSUE CIRC ULARS 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 'COMMISS IONER OF INCOME TAX V/S MADHUKAR K. INAMDAR (HUF) REPORTED IN '(201 0) 229 CTR (BOM) 77, INTERPRETED THE AFORESAID CIRCULAR. THE C IRCULAR 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 T AX EFFECT EXCEEDED RS. 4 LACS. PARAGRAPH 11 OF THAT INSTRUCTION STIPUL ATED THAT IT WAS APPLICABLE TO APPEALS FILED ON OR AFTER 15TH MAY, 2 008. IT WAS FURTHER 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 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 PRECLU DE THE DEPARTMENT FROM CONTINUING WITH THE APPEALS AND/OR PETITIONS F ILED PRIOR TO 15TH MAY, 2008, IF THEY INVOLVED A SUBSTANTIAL QUESTION OF LAW OF A RECURRING NATURE, NOTWITHSTANDING THE FACT THAT THE TOTAL CUM ULATIVE TAX EFFECT INVOLVED IN THE APPEALS WAS LESS THAN RS. 4 LACS. I T WAS SUBMITTED, SUCH APPEALS WHICH WERE FILED PRIOR TO THE ISSUANCE OF INSTRUCTION AND WHERE SUBSTANTIAL QUESTIONS OF LAW WERE RAISED, WER E REQUIRED TO BE DECIDED ON MERITS. THE COURT, WHILE 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 THA N RS. 4 LACS NOTWITHSTANDING THE ISSUE BEING OF RECURRING NATURE . RELYING ON THE JUDGEMENT IN CIT V/S POLYCOTT CORPORATION, THE COUR T OBSERVED AS FOLLOWS: ITA NO.612/IND/2016 ACIT VS. RAJEEV KAPOOR, BHOPAL A.Y.2004-05 PAGE 8 OF 11 8 '6 THE AFORESAID JUDICIAL VERDICT MAKES IT CLEAR THAT THE CIRCULAR DT. 15TH MAY, 2008 IN GENERAL AND PARA (5) THEREOF IN P ARTICULAR LAY DOWN THAT EVEN IF THE SAME ISSUE, IN RESPECT OF SAME ASS ESSEE, FOR OTHER ASSESSMENT YEARS IS INVOLVED, EVEN THEN THE DEPARTM ENT 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 THE N, THE REVENUE IS NOT EXPECTED TO FILE APPEALS IN SUCH CASES, IF THE TAX IMPACT IS LESS THAN THE MONETARY LIMIT FIXED 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 C ASES FILED AFTER 15TH MAY, 2008 AND IN COMPLIANCE THEREOF, THEY DO N OT FILE APPEALS, IF THE TAX EFFECT IS LESS THAN RS. 4 LAKHS; BUT THE SA ID CIRCULAR 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 THA N RS. 4 LAKHS. IN OUR VIEW, THERE IS NO LOGIC BEHIND THIS BELIEF ENTERTAI NED BY THE REVENUE.' THE COURT HAS FURTHER HELD THAT THE PREVAILING INST RUCTIONS FIXING THE MONETARY LIMIT FOR THE TAX EFFECT WOULD HOLD GOOD E VEN FOR PENDING CASES. ACCORDINGLY, THE COURT DISMISSED ALL THE APP EALS 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 EFFECT DO ES NOT EXCEED THE MONETARY LIMITS PRESCRIBED, HENCEFORTH. THE MONETAR Y LIMITS PRESCRIBED FOR FILING AN APPEAL UNDER SECTION 260A BEFORE THE HIGH COURT HAS BEEN RAISED TO RS. 10 LACS. THIS INSTRUCTION IS IDENTICA L TO THE CBDT INSTRUCTION NO. 5 OF 2008. CLAUSE 10 OF THIS CIRCUL AR INDICATES THAT MONETARY LIMITS WOULD NOT APPLY TO WRIT MATTERS AND DIRECT TAX MATTERS OTHER THAN INCOME TAX. IT FURTHER PROVIDES THAT WHE RE THE TAX EFFECT IS NOT QUANTIFIABLE, THE DEPARTMENT SHOULD TAKE A DECI SION TO FILE APPEALS ON MERITS OF EACH CASE. CLAUSE 11, AGAIN PROVIDES T HAT THE INSTRUCTION WOULD APPLY TO APPEALS FILED ON OR AFTER ....2011 A ND APPEALS FILED BEFORE ...... 2011 WOULD BE GOVERNED BY THE INSTRUC TIONS ON THIS SUBJECT, OPERATIVE AT THE TIME WHEN SUCH APPEALS WERE FILED. ITA NO.612/IND/2016 ACIT VS. RAJEEV KAPOOR, BHOPAL A.Y.2004-05 PAGE 9 OF 11 9 11. IN OUR OPINION, WHEN A SIMILAR CLAUSE HAS BEEN INTERPRETED BY THE DIVISION BENCH OF THIS COURT IN CIT VS. MADHUKARINA MDAR (SUPRA), THE SAME PRINCIPLES MUST APPLY IN THE PRESENT CASES ALS O, AS WE HAVE FOUND THAT THE INSTRUCTIONS OF 15TH MAY, 2008 IS PA RA- 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 'COMMISSIONER INCO ME TAX DELHI-III V/S M/S P.S. JAIN AND CO. DECIDED ON 2ND AUGUST, 20 10 HAS HELD THAT THE CBDT CIRCULAR RAISING THE MONETARY LIMIT OF THE TAX EFFECT TO RS. 10 LACS WOULD BE APPLICABLE TO 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 CONSIDER ED IN CHHAJER'S CASE HAS ALSO BEEN INTERPRETED IN POLYCOT CORPORATI ON (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 E FFECT IS CONSIDERABLY SMALL. THEREFORE, IN OUR OPINION, THE TAX APPEALS A RE REQUIRED TO BE DISMISSED, AS THEY ARE NOT MAINTAINABLE IN VIEW OF THE PROVISIONS OF SECTION 268A OF THE INCOME TAX, AND THE CBDT INSTRU CTION 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 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 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 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.' ITA NO.612/IND/2016 ACIT VS. RAJEEV KAPOOR, BHOPAL A.Y.2004-05 PAGE 10 OF 11 10 5. WE ALSO FIND FROM THE ABOVE CASE LAW OF HONBLE G UJARAT HIGH COURT IN THE CASE OF SURESH CHANDRA DURGAPRASA D KHATOD (HUF) ( SUPRA ) THAT IN THE SIMILAR SITUATION, EXACTLY IDENTICAL INSTRUCTIONS WERE APPLIED WITH RETROSPECT IVE EFFECT TO THE PENDING APPEALS. THE HONBLE GUJARAT HIGH COUR T HAS DISCUSSED THAT ALMOST ALL HIGH COURTS ARE OF THE UN ANIMOUS VIEW, CONSIDERING THE MAIN OBJECTIVE OF SUCH INSTRUC TIONS THAT TO REDUCE THE PENDING LITIGATION, WHERE THE TAX EFFE CT IS CONSIDERABLE LOW OR SMALL, THE APPEAL IS NOT MAINTAI NABLE. 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 QUOTED CIRCULAR NO. 21 OF 2015 WILL A PPLY TO PENDING APPEALS ALSO FOR THE REASON THAT THE SAME I S EXACTLY IDENTICAL TO EARLIER INSTRUCTIONS. 6. IN VIEW OF THE ABOVE DISCUSSION AND IN THE LIGHT OF THE LATEST CIRCULAR ISSUED BY THE CBDT, AS REPRODUCED A BOVE, SINCE THE TAX EFFECT INVOLVED IN THE PRESENT APPEAL IS BELOW THE MONETARY LIMIT, THEREFORE, WE DISMISS THE DEPARTMENT AL APPEAL IN LIMINE BEING NOT MAINTAINABLE. ITA NO.612/IND/2016 ACIT VS. RAJEEV KAPOOR, BHOPAL A.Y.2004-05 PAGE 11 OF 11 11 7. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED, BEING NOT MAINTAINABLE. THE ORDER HAS BEEN PRONOUNCED IN OPEN COURT ON THE 18 TH AUGUST, 2016. (D.T.GARASIA) JUDICIAL MEMBER (O.P.MEENA) ACCOUNTANT MEMBER DATED : 18 TH AUGUST, 2016. CPU* COPY OF THE ORDER FORWARDED TO : THE ASSESSEE/ PCIT- INDORE/ CIT(A)-I, INDORE, AO/ D R- INDORE BENCH/ GUARD FILE BY ORDER ASSISTANT REGISTRAR OF ITAT, INDORE BENCH