THE DCIT, (CENTRAL)-I, Bhopal V. SMT. CHARU GUPTA, Bhopal

ITA 68/IND/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5813 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 10-02-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 29-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R VARSHNEY
• Keywords: Audit objection; Retrospective amendment; Question of law; Tax effect
• Section: 260A; 12A

Judgement Text

SMT. CHARU GUPTA ITA NOS., 43 & 130/IND/2015 & 68/IND/2015 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER AND SHRI B.C. MEENA, HONBLE ACCOUNTANT MEMBER IT(SS)A NO. 43/IND/2015 & ITA NO. 130/IND/2015 A.YS.2010-11 & 2012-13 SMT. CHARU GUPTA BHOPAL PAN ABCPG 1206D ::: APPELLANT VS DY. COMMR. OF INCOME TAX (CENTRAL), BHOPAL ::: RESPONDENT ITA NO. 68/IND/2015 A.Y. 2012-13 DY. COMMR. OF INCOME TAX (CENTRAL), BHOPAL ::: APPELLANT VS SMT. CHARU GUPTA BHOPAL ::: RESPONDENT ASSESSEE BY NONE RESPONDENT BY SHRI R. VARSHNEY DATE OF HEARING 10.2.2016 DATE OF PRONOUNCEMENT 10.2.2016 SMT. CHARU GUPTA ITA NOS., 43 & 130/IND/2015 & 68/IND/2015 2 O R D E R PER SHRI B.C. MEENA, AM THESE APPEALS FILED BY THE ASSESSEE AND THE REVENUE EMANATE FROM THE ORDERS OF THE LEARNED CIT(A) -II, BHOPAL, DATED 14.11.2014. 2. AT THE TIME OF HEARING, NONE IS PRESENT FOR THE ASSESSEE WHEREAS SHRI RAJEEV VARSHNEY, LEARNED CIT DR IS PRESE NT FOR THE REVENUE. IT(SS)A NO. 43/IND/2015 & ITA NO.130/IND/2015 3. THESE APPEALS WERE FILED BY THE ASSESSEE. THESE APPEALS WERE FIXED FOR HEARING ON 7.12.2015 ON WHICH T HE ASSESSEE SOUGHT ADJOURNMENT AND ACCORDINGLY THESE APPEALS WERE FIXED FOR 10.2.2016. BUT ON THIS DATE, N ONE APPEARED ON BEHALF OF THE ASSESSEE. HOWEVER, SHRI RAJEE V VARSHNEY, LEARNED CIT DR WAS PRESENT FOR THE REVENUE. SMT. CHARU GUPTA ITA NOS., 43 & 130/IND/2015 & 68/IND/2015 3 4. FROM THE ABOVE CONDUCT OF THE ASSESSE, IT SEEMS TH AT THE ASSESSEE IS NOT INTERESTED IN PURSUING THE APPEALS . IT WAS THE DUTY OF THE ASSESSEE TO MAKE NECESSARY ARRANGEMENTS FOR EFFECTIVE REPRESENTATION ON THE APPOIN TED DATE. MERE FILING OF APPEAL IS NOT ENOUGH RATHER IT REQU IRES EFFECTIVE PROSECUTION ALSO. IN VIEW OF THESE FACTS, W E ARE OF THE VIEW THAT THE APPEAL OF THE ASSESSEE IS LIABLE FOR DISMISSAL. OUR VIEW IS SUPPORTED BY THE FOLLOWING JU DICIAL PRONOUNCEMENTS: I) IN THE CASE OF CIT V. B.N. BHATTACHARGEE AND ANOTHER, REPORTED IN 118 ITR 461 (RELEVANT PAGES 477 AND 478) WHEREIN THEIR LORDSHIPS HAVE HELD THAT: THE APPEAL DOES NOT MEAN MERELY FILING OF THE APPEAL BUT EFFECTIVELY PURSUING IT. II) IN THE CASE OF ESTATE OF LATE TUKOJIRAOHOLKAR V. CWT, 223 ITR 480 (M.P.) WHILE DISMISSING THE REFERENCE MADE AT THE INSTANCE OF THE ASSESSEE IN DEFAULT MADE FOLLOWING OBSERVATION IN THEIR ORDER: SMT. CHARU GUPTA ITA NOS., 43 & 130/IND/2015 & 68/IND/2015 4 IF THE PARTY, AT WHOSE INSTANCE THE REFERENCE IS MADE, FAILS TO APPEAR AT THE HEARING, OR FAILS IN TAKING STEPS FOR PREPARATION OF THE PAPER BOOKS SO AS TO ENABLE HEARING OF THE REFERENCE, THE COURT IS NOT BOUND TO ANSWER THE REFERENCE. III) IN THE CASE OF CIT V. MULTIPLAN INDIA LTD., 38 ITD 320 (DEL), THE APPEAL FILED BY THE REVENUE BEFORE THE TRIBUNAL, WHICH WAS FIXED FOR HEARING. BUT ON THE DATE OF HEARING, NOBODY REPRESENTED THE REVENUE/APPELLANT NOR ANY COMMUNICATION FOR ADJOURNMENT WAS RECEIVED. THERE WAS NO COMMUNICATION OR INFORMATION AS TO WHY THE REVENUE CHOSE TO REMAIN ABSENT ON DATE. THE TRIBUNAL ON THE BASIS OF INHERENT POWERS, TREATED THE APPEAL FILED BY THE REVENUE AS UNADMITTED IN VIEW OF THE PROVISIONS OF RULE 19 OF THE APPELLATE TRIBUNAL RULES, 1963. 5. IN THE RESULT, THESE APPEALS FILED BY THE ASSESSEE ARE DISMISSED FOR NON-PROSECUTION. ITA NO. 68/IND/2015 6. THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER DATED 14.1.2014. IN THIS CASE, SMT. CHARU GUPTA ITA NOS., 43 & 130/IND/2015 & 68/IND/2015 5 WE FIND THAT THE TAX INVOLVED IN THE APPEAL IS BELOW TAXABLE LIMIT AS PRESCRIBED BY THE CBDT VIDE CIRCULAR NO. 21/20145 ISSUED ON 10.12.2015. THE CBDT 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 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. SMT. CHARU GUPTA ITA NOS., 43 & 130/IND/2015 & 68/IND/2015 6 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 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 SMT. CHARU GUPTA ITA NOS., 43 & 130/IND/2015 & 68/IND/2015 7 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 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 SMT. CHARU GUPTA ITA NOS., 43 & 130/IND/2015 & 68/IND/2015 8 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 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 SMT. CHARU GUPTA ITA NOS., 43 & 130/IND/2015 & 68/IND/2015 9 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. 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. 7. IN VIEW OF THE ABOVE CIRCULAR, SINCE THE TAX EFFEC T INVOLVED IN THIS APPEAL IS BELOW THE PRESCRIBED MONET ARY LIMIT FOR FILING OF APPEALS BEFORE THE ITAT, THEREFOR E, THE PRESENT APPEAL DESERVES TO BE DISMISSED IN LIMINE BEING NOT MAINTAINABLE IN VIEW OF ABOVE CIRCULAR NO. 21/20145 DATE D 10.12.2015. 8. WE FURTHER FIND THAT HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS M/S. P. S. JAIN & CO. IN ITA NO.179/1 991 DATED 02.08.2010 HAS HELD AS UNDER: SMT. CHARU GUPTA ITA NOS., 43 & 130/IND/2015 & 68/IND/2015 10 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 POLICY FOR OLD MATTERS NEEDS TO BE ADOPTED BY THE DEPARTME NT. 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 OF CI T V. SURESHCHANDRA DURGAPRASAD KHATOD (HUF) (2012) 253 CTR 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 CONDITIO N IN THAT INSTRUCTION ALSO THAT THE SAME WOULD APPLY TO APPE ALS SMT. CHARU GUPTA ITA NOS., 43 & 130/IND/2015 & 68/IND/2015 11 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 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. 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 BOOK WITH RETROSPECTIVE EFFECT. SECTION 268A CARVES OUT AN 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 SMT. CHARU GUPTA ITA NOS., 43 & 130/IND/2015 & 68/IND/2015 12 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. PARAGRAPH 11 OF THAT INSTRUCTION STIPULATED THAT IT WAS APPLICABLE TO APPEALS FILED ON OR AFTER 15TH MAY, 2 008. IT WAS FURTHER PROVIDED THAT IN CASES, WHERE APPEALS W ERE FILED BEFORE 15TH MAY, 2008, THEY WOULD BE GOVERNED BY THE INSTRUCTIONS ON THIS SUBJECT WHICH WERE OPERATI VE AT THE TIME WHEN SUCH APPEALS WERE FILED. THE INSTRUCT ION 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 WIT H THE APPEALS AND/OR PETITIONS FILED PRIOR TO 15TH MAY, 2 008, IF THEY INVOLVED A SUBSTANTIAL QUESTION OF LAW OF A RE CURRING NATURE, NOTWITHSTANDING THE FACT THAT THE TOTAL CUM ULATIVE TAX EFFECT INVOLVED IN THE APPEALS WAS LESS THAN RS . 4 LACS. IT WAS SUBMITTED, SUCH APPEALS WHICH WERE FIL ED PRIOR TO THE ISSUANCE OF INSTRUCTION AND WHERE SUBS TANTIAL QUESTIONS OF LAW WERE RAISED, WERE REQUIRED TO BE D ECIDED ON MERITS. THE COURT, WHILE CONSIDERING THE ISSUE OBSERVED THAT PARAGRAPH 5 OF THE CIRCULAR MADE IT C LEAR THAT NO APPEALS WOULD BE FILED IN THE CASES INVOLVI NG TAX EFFECT LESS THAN RS. 4 LACS NOTWITHSTANDING THE ISS UE BEING OF RECURRING NATURE. RELYING ON THE JUDGEMENT IN CIT V/S POLYCOTT CORPORATION, THE COURT OBSERVED AS FOL LOWS: SMT. CHARU GUPTA ITA NOS., 43 & 130/IND/2015 & 68/IND/2015 13 '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 SAM E ISSUE, IN RESPECT OF SAME ASSESSEE, FOR OTHER ASSESSMENT Y EARS IS INVOLVED, EVEN THEN THE DEPARTMENT SHOULD NOT FI LE 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 APPE ALS IN SUCH CASES, IF THE TAX IMPACT IS LESS THAN THE MONE TARY 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 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.' 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 SMT. CHARU GUPTA ITA NOS., 43 & 130/IND/2015 & 68/IND/2015 14 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 APPLY TO APPEALS FILED ON OR AFTER ....2011 AND APP EALS 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. MADHUKARINAMDAR (SUPRA), THE SAME PRINCIPLES MUST APPLY IN THE PRESENT CASES ALSO, AS WE HAVE FOUND T HAT THE INSTRUCTIONS OF 15TH MAY, 2008 IS PARA- MATERIA L 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 SMT. CHARU GUPTA ITA NOS., 43 & 130/IND/2015 & 68/IND/2015 15 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 PE NDING 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 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 CONSIDER ABLY SMALL. THEREFORE, IN OUR OPINION, THE TAX APPEALS A RE REQUIRED TO BE DISMISSED, AS THEY ARE NOT MAINTAINA BLE IN VIEW OF THE PROVISIONS OF SECTION 268A OF THE INCOM E 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 DIVISION BENCH HAS CONSIDERE D 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. SMT. CHARU GUPTA ITA NOS., 43 & 130/IND/2015 & 68/IND/2015 16 (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.' 9. WE ALSO FIND FROM THE ABOVE CASE LAW OF HONBLE GUJARAT HIGH COURT IN THE 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 CO URT HAS DISCUSSED THAT ALMOST ALL HIGH COURTS ARE OF THE UNANIMOUS VIEW, CONSIDERING THE MAIN OBJECTIVE OF SUC H INSTRUCTIONS THAT TO REDUCE THE PENDING LITIGATION, W HERE THE TAX EFFECT IS CONSIDERABLE LOW OR SMALL, THE APPEAL IS NOT MAINTAINABLE. THE RECENT INSTRUCTION REVISING THE MON ETARY LIMIT TO RS. 10 LAKHS FOR FILING APPEAL BEFORE ITAT ON INCOME TAX MATTERS, AS ISSUED VIDE THE ABOVE CIRCULAR WILL APPL Y TO SMT. CHARU GUPTA ITA NOS., 43 & 130/IND/2015 & 68/IND/2015 17 PENDING APPEALS ALSO FOR THE REASON THAT THE SAME IS EXACT LY IDENTICAL TO EARLIER INSTRUCTIONS. 10. IN VIEW OF THE ABOVE DISCUSSION AND THE LATEST CIRCULAR ISSUED BY THE CBDT, AS REPRODUCED ABOVE, SINCE THE TAX EFFECT INVOLVED IN THE PRESENT APPEAL IS BELOW THE MONETARY LIMIT, THEREFORE, WE DISMISS THIS DEPARTMENTAL APPEAL IN LIMINE BEING NOT MAINTAINABLE. 11. IN THE RESULT, THE APPEALS FILED BY THE ASSESSEE AND REVENUE STAND DISMISSED. PRONOUNCED IN OPEN COURT ON 10.2.2016. SD/- SD/- (D.T. GARASIA) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED - 10.2.2016 DN/- SMT. CHARU GUPTA ITA NOS., 43 & 130/IND/2015 & 68/IND/2015 18