ITO, Cuddalore V. M/s. N.R & Co., Cuddalore

ITA 805/CHNY/2009

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 6525 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 25-05-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 25-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S SRIDHAR
• Keywords: Audit objection; Tax effect
• Section: 260A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH A CHENNAI BEFORE SHRI U.B.S. BEDI, J.M. AND SHRI N.S. SAINI , AM .. I.T.A. NO. 805/MDS/2009 A Y: 2004-05 THE INCOME-TAX OFFICER WARD I(1) CUDDALORE VS. M/S N.R. & CO KAVIARASU VAIRAMUTHU NAGAR ANAIYAMPT, POOVANIKUPPAM ALAPAKKAM, CUDDALORE PAN : AAEFN 3813 A (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S. SRIDHAR DEPARTMENT BY : SHRI SHAJI P. JACOB O R D E R PER N.S. SAINI:- THIS APPEAL OF THE REVENUE FOR ASSESSMENT YEAR 2004 -05 IS DIRECTED AGAINST THE ORDER DATED 07.01.2009 OF THE LD. CIT(A )-XII, CHENNAI. 2. WHEN THE MATTER CAME UP BEFORE US, LD. COUNSEL F OR THE ASSESSEE POINTED OUT THAT THE TAX EFFECT IN THIS APPEAL RELE VANT TO ASSESSMENT YEAR 2004-05 WAS LESS THAN ` . 3 LAKHS AND HENCE THE APPEAL OF THE REVENUE IS NOT MAINTAINABLE. LD. D.R. FAIRLY ADMIT TED THAT TAX EFFECT POINTED OUT BY THE LD. A.R. WAS CORRECT. NEVERTHEL ESS, LD. D.R. SUBMITTED THAT CIRCULAR NO. 3/2011DATED 9.2.2011 EN HANCING THE LIMITS PAGE 2 OF 15 I.T.A. NO. 805/MDS/2011 FOR FILING APPEALS FROM RS. 2 LAKHS TO RS. 3 LAKHS WOULD APPLY ONLY PROSPECTIVELY. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS. TAX EFFECT IN THE APPEAL FOR ASSESSMENT YEAR 2004-05 IS ADMITTEDLY LESS THAN RS. 3 LAKHS AND THEREFORE, IRRESPECTIVE OF WHI CH CIRCULAR APPLIED, THE SAID APPEAL IS NOT MAINTAINABLE. QUESTION WHET HER THIS CIRCULAR CAN BE APPLIED IN PENDING APPEALS HAS ALREADY BEEN CONSIDERED BY THIS TRIBUNAL IN ITA NOS. ITA NO.1707/MDS/2010 DATED 4.3 .2011. NEVERTHELESS, FOR THE SAKE OF CONVENIENCE AND BREVI TY, WE ARE CONSIDERING HEREUNDER THE IMPACT OF SUCH CIRCULARS ON PENDING PROCEEDINGS ONCE AGAIN. RELEVANT CIRCULARS ARE GIVE N HEREUNDER: INSTRUCTION NO.5 OF 2008, DT.15 TH MAY,2008. S UBJEC T : REV ISI ON O F MONETARY LIMITS FOR FILING A PP EA LS BY THE D E PARTM E NT BEFORE I N C OME - TAX APP E LLA TE TRIBUNAL S , HIGH COURTS AND SUPREME COURT - MEASURES FOR REDUCING L ITI GATION - REG . R E F E R E N C E I S I NVIT E D TO BO A R D 'S IN S TRU C T I ON S 1\10 . 1 97 9 DT . 2 7 TH MAR C H , 2000 , NO . 1 9 8 5 DT . 2 9 TH J UN E., 2 000, . (' . 6 OF 2 003 , DT . 1 7TH JULY, 2 0 03, O . 1 9 OF 2 00 3, DT . 2 3 RD D EC ., 2 003, O . C; O F 2004, D T. 2 7 TH M A Y , 200 4 , N O . 2 O F 2 0 05 , DT . 24T H OCT., 2005 [( 2005 ) 1 9 8 C TR ( S T ) PAGE 3 OF 15 I.T.A. NO. 805/MDS/2011 4 1] A ND NO . 5 O F 20 0 7, D T . 16TH J U LY, 2 00 7 [( 20 0 7) 21 0 CT R (ST) 76 ] W H E RE I N M O N ETA RY L I MIT S F O R FI L IN G DE PA R T M E NT A L A P P E A L S (I N INCOM E - T AX MATT E R S) AND OTH E R CONDITI O N S WE R E S P E C IFI E D , F OR F IL I NG APPEA L S B E F O R E AP P E LL AT E T RI BUNAL S, H IGH C OU RT S A ND SU P R E M E C O URT. 2 . IN S UP E R S ESS I ON OF TH E A BOV E IN ST RU C TIO N S , I T HA S B EE N D EC ID E D B Y TH E BOAR D THA T D E P A RTM E N TA L AP P EA L S W ILL B E FIL E D B E F O R E APPELLAT E T RIBUN A L S, HIGH C O URT S AND SUPR E M E CO UR T A S P E R M O N E T A R Y L I M IT S A ND C ON DI TI O N S S P E CIFI E D B E L OW : 3. APPEA L S W I LL H E N CEF OR T H B E F I L E D O NL Y I N C A S E S W H E R E TH E TA X E F F E C T EX C EE D S MON E T A R Y LI M IT S G IVEN HERE UN D E R: SL.NO. APPEALS IN INCOME-TAX MATT ERS MONETARY LIMIT (IN RS) 1. APPEAL BEFORE INCOME-TAX TRIBUNAL 2,00,000 2. APPEAL U/S 260A BEFORE HIGH COURT 4,00,00 0 3. APPEAL BEFORE SUPREME COURT 10, 00,000 4. FOR T H I S PUR P OSE , ' TAX E FF EC T ' M EA N S TH E DIFF E R E N C E B E T W EE N TH E T AX ON T H E T O TA L I N C OM E ASSESSE D A N D TH E TA X T H A T W OULD HA V E B EE N CHARG EABLE H A D S UCH TOT A L I NC OM E B EE N R E D U C E D B Y T HE A MO UNT OF INCOM E I N R E S P E C T OF TH E I S S U E AG A IN S T W H I C H APPEAL I S INT E ND E D T O B E FIL E D ( H E R E AF T ER R E FE RR E D T O A S ' D I S PUT E D I SS U ES ' ). HO WEV E R , T H E T AX W IL L 'LO T I N C LUD E A N Y IN T E R ES T TH E R E ON . S IM I LA R L Y, IN L O SS CA SE S NO T I ONAL T A X E F FEC T S HO U LD B E TAK E N I N T O ACCOU N T . IN TH E CA SE OF P E N A L TY O RD E R S , TH E TA X E F F EC T W ILL M E A N Q UA N TUM O F PE N A L T Y D E L E T E D OR R E DU CE D IN TH E O RD E R T O B E APP EA L E D AG A IN S T . 5. TH E A SSESS IN G O F FI C E R S H A L L CA L CU L A T E TH E T A X E F F E CT S E P AR A TE L Y F O R E V E RY A SSESS M E NT Y E A R IN RE S PEC T O F T H E DI S P U T E D I S S U E I N T HE CA S E O F E V E R Y ASSESSEE. IF, I N T H E CASE O F A N ASSESSEE, TH E DI S P U T E D I SS U E S A R I S E I N MOR E TH A N O N E A SSESS M E NT Y E A R , A PP E A L S HA L L B E F IL E D IN R ES P E C T O F S UCH A SSES S ME NT Y EA R O R Y EA R S I N W H I C H T H E TAX E FF EC T IN R ES P EC T O F TH E D I S P U T E D I SS U E EXCEE D S TH E MO N ETAR Y LIMIT S PEC IFI E D IN PA R A 3 . 'I APP EA L S H A LL B E FIL E D I N R E S P E C T O F A N A SSESS M E N T Y E A R OR YEA R S IN W HI C H T H E T A X EFF E CT I S L ES S TH A N T H E MON E T ARY LIM IT S PECIFI E D IN P A RA 3 . IN O T H E R W ORD S , HE N CE F O RT H , A PP EA L S W ILL B E FIL E D O NLY W I T H R E F E R ENCE T O THE TA X E FF EC T I N TH E R E L E V A N T ASSESS M E NT YEA R . H OW E V E R , I N C ASE OF A C OMP OS I TE OR D E R OF A N Y HIGH COURT OR A PP E LL A T E A UTH OR IT Y, W H I C H I N VO L VES M O RE TH A N O N E Y E A R , A P PE AL S HA L L B E FI L E D I N RE S PE CT OF A LL A SSESS M E NT Y EA R S E V E N IF TH E 'TAX E FF EC T ' I S L ESS T H A N T H E PR E SC R I B E D M O N E T ARY L I M I TS IN A N Y O F T H E Y EA R (S), I F I T I S DEC ID E D TO FI L E A PP E A L IN R ES P E C T O F TH E PAGE 4 OF 15 I.T.A. NO. 805/MDS/2011 YEAR( S) IN W H I C H ' TAX E FF ECT ' EX CEE D S T H E MON E T A RY LIM IT PRE SC RIB E D. 6. IN A CASE WHERE APPEAL BEFORE A TRIBUNAL OR COUR T IS NOT FILED ONLY ON ACCOUNT OF THE TAX EFFECT BEING LESS THAN THE MONET ARY LIMIT PRESCRIBED ABOVE, THE CIT SHALL SPECIFICALLY RECORD THAT EVAS ION THOUGH THE DECISION IS NOT ACCEPTABLE, APPEAL IS NOT BEING FILED ONLY O N THE CONSIDERATION THAT THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPEC IFIED IN THIS INSTRUCTION. FURTHER, IN SUCH CASES, THERE WILL BE NO PRESUMPTIO N THAT THE INCOME-TAX DEPARTMENT HAS ACQUIESCED IN THE DECISION ON THE DI SPUTED ISSUES. THE INCOME-TAX DEPARTMENT SHALL NOT BE PRECLUDED FROM F ILING 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 EFFEC T EXCEEDS THE SPECIFIED MONETARY LIMITS. 7 . I N T H E P AS T , A NUM B E R OF I N S T A NC E S H A V E C OM E T O TH E NOT I CE OF TH E BO A RD, W H E R E B Y A S A SSESSEE H AS C L A I M E D R E LI E F FR O M T H E T RIBUN A L O R TH E C OURT ON L Y O N TH E G R O UND TH A T TH E D E P A RTM E NT HA S I MP LI C I T L Y ACCE PT E D T H E D EC I S I O N O F T H E T RI BU N A L OR CO URT IN TH E CAS E O F T H E AS S ESSE E F O R ANY O TH E R A SS ESS M E N T YEA R O R IN T H E C A SE OF ANY OTH E R A SS E SS EE FOR T H E S A M E OR A NY O TH E R A SSESS M E N T Y EA R, BY T F IL I NG A N A PP E A L O N TH E SA M E DI S P U T E D I SS U ES. T H E D EPA RTM E N TA L R EP R ESE NT A T I V ES/CO U N SE L M U S T MAKE E V ER Y E FF O RT TO BRING T O TH E NOTICE O F TH E T RI B U NA L O R T H E CO UR T TH A T TH E A PP EA L I N S U C H C A SES WAS NOT F IL E D O R NOT A DM I TT E D ON L Y BY R EASON OF T H E TA X E F FEC T B E ING L ESS THAN T H E S P E C IF I E D M O N E T ARY LI M I T A ND T H E R E FOR E , I NF E R E N CE S H O UL D B E D RAWN TH A T T H E D EC I S I O N S R E N DE R E D TH E R E I N WE R E ACCE P T AB L E T O TH E D E P A RTM E NT . A CCO RDI NGLY , TH E Y S H O UL D IMP R ESS U PO N T H E T R I B U N A L O R TH E CO UR T T HA T S U C H CA SE S D O NOT HAV E ANY P R ECEDE N T VA LU E . 8. ADVERSE JUDGMENTS RELATING TO THE FOLLOWING SHOU LD BE CONTESTED IRRESPECTIVE OF THE TAX EFFECT: (A) WHERE THE CONSTITUTIONAL VALIDITY OF THE PROVI SION OF AN ACT OR RULE ARE ;UNDER CHALLENGE. ( B) W H E R E BOA RD ' S OR D E R , NO T IFIC A TIO N , I N S T R U C TION O F CIRCULAR H A S PAGE 5 OF 15 I.T.A. NO. 805/MDS/2011 B EE N H E LD TO B E I LL E G A L O F U LTR A VI R ES. (C) WHERE REVENUE AUDIT OBJECTION IN THE CASE HAS B EEN ACCEPTED BY THE DEPARTMENT. 9. THE P R O P OSA L F O R FI L I N G S P E C I A L L EA V E P E T I T I O N UN D E R A RTI C L E 1 36 OF T H E C ON S TI T U T I O N B E F O R E T H E SUPREME CO U R T S HO ULD IN A L L CASES , B E SE N T T O T H E D I R E CTO R A T E O F IN CO M E - TA X ( L E GA L & R ESEA R C H ) N E W DEL HI AND TH E D EC I S I O N TO F I L E S P E C I A L L EAVE P E TITION S H A L L B E I N C ON S ULTATI ON W I TH T H E MI NI S T RY OF L AW A N D J U S TI CE . 10. THE MONETARY LIMITS SPECIFIED IN PARA 3 ABOVE W ILL NOT APPLY TO WRIT MATTERS. 1 1 . T HI S IN S T R U C T I O N W IL L A PP L Y TO A PP E A L S F I L E D ON O R A FT E R 1 5 T H O F M A Y , 2 00 8. HO WEVE R , T HE CASES WHERE A PP EA L S H AV E B EE N F IL E D BE FO R E 1 5 T H O F M AY, 200 8 W I LL B E G OV E RN E D B Y T H E I N S TR U C T I O N S ON TH I S S U B J E CT, OP E R A TIV E A T T HE TIM E W H E N S U C H A P P E AL WA S F IL E D . 12. THIS ISSUES UNDER SECTION 268A(1) OF THE INCOME -TAX ACT, 1961. INSTRUCTION NO.3/2011[F.NO.279/MISC.142/2007-ITJ], DATED 9-2- 2011. R E F E R E N CE I S IN V IT E D TO B OA RD' S IN ST RU C TI O N NO. 5 / 2 008 D A T E D 1 5 - 5 - 2 00 8 W H E R EI N M O N ETA R Y LIMIT S A ND O TH E R CO NDITION S FO R F ILIN G D E P A RTM E NT A L A PP EA L S ( IN IN CO M E -TA X M A T TE R S) B EFO R E A PP E LL A T E T RIBUN A L , HI G H CO URT S A ND S UPR E M E CO URT WE R E S P EC I F I E D. 2. IN S UP ERSESS I O N OF TH E A B OVE I N S TRU C TI O N , IT H AS B EE N D EC ID E D BY TH E B OA RD T H A T D E P A R T M E N TA L A PP E AL S M AY B E F IL E D O N M E RIT S BEF O R E A PP E LL ATE T RIBUN A L , HI G H CO UR TS A ND S UPR E M E CO URT KE E PIN G IN V I EW PAGE 6 OF 15 I.T.A. NO. 805/MDS/2011 TH E M O NETAR Y LIMIT S A ND CO NDITI O N S S P EC IFI E D B E L OW . 3 . H E N CE F O RTH A PPEA L S S H A LL N O T B E FIL E D IN C AS E S W HER E THE T AX EF F EC T D OES N O T E XCEE D TH E M O N E T A R Y LIMIT S G IVEN H E R E UND E R :- S. A PP EA L S IN IN CO M E - T AX M A TT E R S M O NET A R Y LIMIT ( IN R S. ) I . A PP E AL B E FOR E APPELL A T E TRIBUNAL 3, 00 , 000 2 . A PP EA L U /S 260A B E FOR E HI G H COURT 10 , 00 , 000 3. A PP EA L BEF O RE S UP RE M E CO URT 2 5 , 00 , 000 IT I S C L A R IF I E D T H AT AN A PP EA L S H O ULD N O T B E FIL E D M E R E L Y B ECA U SE TH E T AX EFFEC T IN A CASE EXCEE D S T H E M O N E T ARY LI M I TS P R ESC RI BE D A B OVE . F ILIN G OF A PP EA L IN S U C H CASES IS TO BE D EC I DE D O N MER I TS OF TH E CASE. 4. FO R T HI S PUR POSE, 'TAX EFFEC T ' M EA N S TH E DI F F E R E N CE B E T WEE N TH E TAX O N TH E T O T A L IN CO M E ASSESSE D A ND TH E T AX TH A T WO ULD H AVE B EE N C H A R G E A BL E H A D S U C H T O T A L IN CO M E B EE N RED U CED BY T H E A M O UNT OF IN CO M E IN R ES P EC T OF TH E I SS U ES AGAI N ST W HI C H A PP EA L I S IN TE ND E D TO BE F IL E D ( H ERE IN AF T E R R EFE RR E D T O AS ' DI S PUT E D I SS U ES ' ). H OWEVE R TH E TAX W ILL N O T IN C LUD E A N Y INT E R ES T TH EREO N , EXCE PT W H E R E C H A R GEA B I LIT Y O F INT E R ES T I T SE L F I S IN DI S PUT E. IN CASE TH E C H A R GEA BILIT Y OF INT E RE S T I S TH E I SS U E UND E R DI S PUTE , TH E A M O UNT OF INT E R ES T S H A LL B E TH E T AX EF F ECT . IN CASES W H E RE R E TURN E D L OSS I S R E DU CE D OR ASS E SSE D AS IN CO M E, TH E T AX EFFEC T WO ULD IN C LUD E N O TI O N A L T AX ON DI S PUT E D A DDITI O N S. IN C AS E OF P E N A LT Y O RD E R S, TH E T AX EFFEC T W ILL M EA N QU A NTUM O F PEN A LT Y D E L E T E D O R R E DU C ED PAGE 7 OF 15 I.T.A. NO. 805/MDS/2011 IN TH E ORD E R T O B E A PP EA L E D A G AIN S T . 5. T H E ASSESS IN G OFFIC E R S H A LL CA LCUL A T E TH E T AX E FF E CT SE P A R A T E L Y F O R E V E R Y ASSESS M E NT YEA R IN R ES P EC T O F THE DI S PUT E D I SS U ES IN TH E C ASE O F E V E R Y ASSESSEE . IF , IN TH E CASE OF A N ASSESSEE, TH E DI S PUTED I SS U ES A RI SE IN M O R E THAN O N E ASSESS M E NT YEA R , A PPE A L , CA N B E F IL E D IN R ES P EC T OF S U C H ASSESS M E NT YEA R O R YEA R S IN W HI C H T H E T AX EF F EC T IN R ES P EC T OF T H E D I SP U TE D ISS U ES EXCE ED S TH E M O N E T A R Y LIMIT S P EC IFI E D IN P A R A 3 . NO A PP EA L S H A LL B E F IL E D IN R ES P ECT OF AN ASSESS M E NT YEAR OR YEA R S I N W HI C H TH E T AX EF F EC T I S L ESS TH A N TH E M O N ETA R Y LIMI T S P EC I F I E D IN P A R A 3. IN O TH E R WO RD S, H E N CE F ORT H , A PP EA L S CA N B E FIL E D O NL Y WIT H R EFE R E N CE T O TH E T A X EFFEC T IN T H E R E L EVA NT ASSESS M E NT YEA R . HOWEVER, I N CASE OF A CO MP OSI T E OR D E R OF AN Y HI G H CO UR T OR A PP E LL ATE A U T H O RI TY, W HI C H I N VO L VES M ORE TH A N O N E ASSESS M E N T YEA R A ND CO MM O N ISS U ES I N M O R E TH A N O N E ASSESS M E NT YEA R , A PP EA L S H A LL BE F IL ED IN R ES P ECT OF A LL S U C H ASSESS M E N T YEA R S EVE N IF T H E 'TAX EFFECT' I S L ESS TH A N T H E P RESC RIB E D M O N E T A R Y LIM I T S IN A N Y OF TH E YEA R (S), I F IT I S D ECI D E D TO F IL E A PP EA L I N R ES P EC T OF T H E YEA R (S) IN W HI C H ' T AX EFFEC T ' EXCEE D S TH E M O N E T A R Y LIM I T PR ESC RIB E D . IN CASE W H ERE A CO MP OS IT E O RD E R / J UD G M E NT IN VO L VES M O R E TH A N O N E A SSESSEE, EAC H ASSESSEE S H A LL B E DEA L T W ITH SE P A R A T E L Y. 6 . IN A CASE W H E R E A PP EA L B E F O R E A T RIBUN AL O R A CO URT I S N O T F IL E D O NL Y O N ACCO UN T OF TH E TAX EFFEC T BE IN G L ESS TH AN TH E M O N E T ARY LIM I T S P EC I F I E D A B OVE , T H E CO MMI SSIO N E R OF I NCO M E -T AX S HALL S P EC IFI C ALL Y R ECO RD TH AT 'E V E N TH O U G H TH E D EC I S I O N I S N O T ACCE PT A BL E, AP P EA L I S N O T B E IN G FI L E D O NL Y O N THE CO N S ID E R A TI O N TH AT T H E TAX EFFEC T I S L ESS TH A N TH E MO N E T ARY PAGE 8 OF 15 I.T.A. NO. 805/MDS/2011 LIMIT S P EC IFI E D IN THI S IN S TRU C TI O N '. F URTH E R , IN S U C H C ASES, TH E R E W ILL B E N O PR ES UMP T I O N TH A T TH E IN CO M E -T AX D E PARTM E NT H AS AC QUI ESCE D IN TH E D EC I S I O N O N TH E D IS PU TE D ISS U ES . T H E IN CO M E -T AX D E P A RTM E NT S H A LL N O T B E P REC LUD E D FR O M FI LIN G A N A PP EA L AGAI N S T T H E DI SP U TE D I SS U ES IN TH E CASE OF TH E SA M E ASSESSEE FO R A N Y O TH E R ASSESS M E NT YEA R , O R I N TH E CASE OF A N Y O TH E R ASSESSEE F O R TH E SA M E O R A N Y O TH E R ASSESS M E N T YEA R , IF TH E T AX EFFECT EXCEE D S T H E S P ECI FI E D M O N E T A R Y LIMIT S. 7. IN T H E PAST , A NUM BER OF IN S T A N CES H AVE CO M E T O TH E N O TI CE OF TH E B OA R D, W H EREBY A N ASSESSEE H AS C L A IM E D R E LI E F FR O M TH E TRIBUN A L O R TH E CO UR T O NL Y O N THE G R O UND TH AT T H E DE P AR TM E NT H AS IMPLI C ITL Y A C C EPTED TH E D EC I S I O N OF TH E T RIBUN A L O R CO UR T IN TH E CASE OF T H E ASSESSEE FO R A N Y O TH E R ASSESS M E NT YEA R O R I N TH E CASE O F A N Y O TH ER ASSESSEE FOR T H E SA M E O R A N Y O TH E R ASSESS M E N T YEA R , B Y N O T FILIN G A N A PP EA L O N TH E SA M E DI S PUT E D I SS U ES . T H E D E P AR TM E N TA L RE PR ES ENT A TI V E S / CO UN SE L S MU S T M A K E EVE R Y EFFO RT T O B R IN G TO T H E N O TI CE OF TH E T RIBUN A L OR TH E CO U R T TH AT TH E A PP EA L IN S U C H CAS E S WAS N O T FIL E D O R N O T A DMITT E D O NL Y F O R TH E R EASO N OF TH E T AX EF F ECT BE IN G L ESS TH A N TH E S P EC IFI E D M O N E T A R Y LIMI T A ND , T H E R EFORE, N O IN FE R E N CE S H O ULD BE DR AW N TH A T TH E D EC I S I O N S R E N DE R E D TH E R E IN WE R E ACCEPTA BL E T O TH E D E P AR TM E NT. ACCOR DIN G L Y, TH EY S H O ULD IMP RESS UP O N TH E T RIBUN A L O R TH E CO U R T T H A T S U C H CASES D O N O T H AVE A N Y PR ECE D E NT V A LU E . AS TH E EV ID E N CE OF N OT FI LIN G A PP EA L D U E T O THI S I N S T R U C TI O N M AY H AVE T O B E PR O DU CE D IN CO URT S, T H E J UDI C I A L FO LD E R S IN T H E OFFICE OF C I T MU S T B E M A INTAIN E D IN A SYS T E MI C M A NN E R FO R E ASY R E TRI EVA L. 8. A D VE R SE J UD G M E NT S R E L A TIN G TO TH E FO LL OW IN G I SS U ES S H O ULD B E PAGE 9 OF 15 I.T.A. NO. 805/MDS/2011 CO NT ES T E D O N M ER IT S N OTW ITH S T A NDIN G TH A T TH E T AX EFFEC T E NT A IL E D I S L ESS THAN TH E M O N E T A R Y LIMIT S S P ECIFIE D IN PA R A 3 A B OVE O R TH E R E I S N O T AX EFFE CT. (A) W H E R E TH E CO N S TITUT IO N A L VA LIDIT Y OF TH E PR OV I S I O N S OF A N AC T O R RUL E A R E UND ER C H A LL E N GE , O R (B) W H ERE BOAR D 'S O RD E R , NO TIFI C ATI O N , IN S TRUCTI O N O R C IR C UL A R H AS B EE N H E LD T O BE ILL EGA L O R U LTR A VI R ES, OR (C) W H E R E R EVE NU E A UDIT O BJ EC TI O N I N TH E CASE H AS B EE N ACCE PT E D B Y TH E D EPAR TM E N T . 9. T H E PR OPOSA L FO R FILIN G S P ECIA L LEAVE PE TITI O N UND ER A RTICLE 13 6 OF TH E CO N S TI T UT ION BEFO R E T H E S U P R E M E CO UR T S H O ULD , I N A LL C A SES , B E SE NT T O THE DIR EC T ORA T E OF IN CO M E -T A X (LEGA L & R ESEARC H ), NEW D E LHI AND THE D EC I S I O N T O FIL E S P EC I A L L EAVE P E TITI O N S H A LL B E IN CO N S U L T AT I O N W ITH TH E MIN IST R Y OF LAW AND JU S TI CE . 10. T H E M O N E T ARY LIMIT S S P ECIF I E D IN P A R A 3 A B OVE S H A LL N OT A PPL Y TO W RIT M AT T E R S A ND D I REC T T AX M A TT E R S O TH E R TH A N IN CO M E -T AX, FILIN G O F A PP EA L S I N O TH E R DIR EC T T AX M A TT ERS S H A LL CO NTINU E T O B E GOVER N E D B Y R E L EVA NT PR OV I S I O N S OF S T A TUT E A ND RUL ES. F UR T H E R , F ILIN G OF A PP EA L IN CASES O F IN CO M E -TA X , W H E R E T H E T AX EF F ECT I S N OT QU A NTIFI A BL E OR N O T INVO L VE D , S U C H AS TH E CASE OF R EG I S TR AT I O N OF T RU S T S O R IN S TITUTI O N S UND E R SEC TI O N 1 2A OF TH E I T ACT , 1 96 1 , S H A LL N O T B E GOVE RN E D B Y TH E LIM I T S S P EC I FIE D IN P A R A 3 A B OVE A ND D ECISIO N TO F IL E APPEA L IN S U C H CASES M AY B E T AKE N O N M E R I T S OF A P ART I C UL A R CASE. PAGE 10 OF 15 I.T.A. NO. 805/MDS/2011 11. T HI S IN S TRU CT I O N W IL L A PPL Y T O A PP E AL S FIL E D O N O R A FTE R 9 TH FEBRUARY, 2011. H OWEVER, T H E CASES W H E R E A PP EA L S HA VE B EE N FIL E D BEF O R E 9 TH FEBRUARY 2011 W ILL B E GO V E RN E D B Y TH E IN S TRU C TI O N S O N THI S S UBJ EC T , O P E R A TI VE A T TH E TIM E W H E N S U C H APP E AL WAS F IL E D . 12. THIS ISSUES UNDER SEC. 268A(1) OF THE INCOME-TA X ACT, 11961. 4. IT CAN BE SEEN THAT BOTH THE ABOVE SAID INSTRUCT IONS CARRIED SIMILAR CLAUSE NO.11. THE WORDINGS BEING SAME, EXCE PT FOR THE DATES. WHEREAS IN INSTRUCTION NO.5 OF 2008 THE DATE MENTIO NED WAS 15-05- 2008, IN INSTRUCTION NO.3 OF 2011 DATE MENTIONED IS 09-02-2011. ADMITTEDLY, APPEAL HERE HAS BEEN FILED BY THE REVEN UE ON 25.05.2009 AND AFTER 15-05-2008. THE QUESTION AS TO WHICH INST RUCTION WOULD APPLY IS AN ISSUE WHICH IN OUR OPINION RESOLVED BY THE DE CISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. S. SUMATHI (317 ITR 422). ONE OF THE QUESTIONS RAISED BY THE REVENUE IN THE SAID APPEAL IS REPRODUCED HEREUNDER: WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE TRIBUNAL WAS RIGHT IN REJECTING ;THE REVENUES APPL ICATION FOR RECTIFICATION OF ITS APPELLATE ORDER FOR THE ASST. YR. 1994-95 ( IN RESPECT OF TAX CASE NO.258 OF 2005) 1995-96 (IN RES PECT OF TAX CASE NO.259 OF 2005) IN THE ASSESSEES OWN CASE WHE REIN THE PAGE 11 OF 15 I.T.A. NO. 805/MDS/2011 TRIBUNAL HAS SUMMARILY DISMISSED THE REVENUES APPE AL ON THE GROUND THAT THE MONETARY LIMIT WAS LESS THAN `1,00, 000 WHEREAS AT THE TIME OF FILING APPEAL ON 3 RD MARCH, 2000, THE MONETARY LIMIT WAS ONLY `25,000 AS PER INSTRUCTION NO.1777 OF THE BOAR D DT. 4TH NOV. 1987? 5. IT WAS HELD BY THE HONBLE JURISDICTIONAL HIGH C OURT IN PARAS 5 TO 8 AS UNDER: 5 . A I SS U E S IMI L AR T O TH E I S S U E I N T HI S CA S E CAM E UP FOR CONSI D E RA T I ON B E FOR E A D I V I S I ON BE N C H O F THI S CO U R T IN TH E C A S E O F CWT VS . S. A NN A M A LAI (S UPR A ) W H E R E IN I T WAS H E L D TH A T IN O RD E R T O R E DU CE T H E LITIGATION F O R F ILING D E PARTM E NTAL A P P EA L S/ R E F E R E NC ES B E FOR E T H E T RIBUNA L , H I G H C OURT S A ND T H E S UPR E M E COURT , TH E CB DT , BY C I R CULAR F . N O . 2 7 9/1 2 6/ 1 9 9 8 - IT , DT. 2 7T H M A R C H , 2 0 00 , R EF I XE D T H E R RY IRS , H OWEVE R , CAS T I NG OUT CE RT AI N EXCEP TI O N S. T H E EXCEP TI ONS S TAT E D AR E ( I ) WH E RE THE REVE NU E A UDI T O BJ EC T I O N IN T H E CA SE HA S B EE N A C CE P TE D B Y T H E D E PAR T M E N T, ( II ) W H ER E T HE BOAR D 'S O R DE R , NOT I FI C AT I O N , I N STRUC TI O N O R CI R CU L A R IS T H E SUBJ E CT - MATT E R O F AN ADV E R SE ORD E R, (III ) WH E RE PROSEC UT I O N PROCEED IN G S A R E C O N TE M P L AT E D AG A I N S T TH E A S SES SEE , A N D ( IV) W H E R E TH E C O N ST I TUT I O N A L VA LID I TY OF TH E PRO V I S ION S O F TH E A C T A R E UND E R C H A L L E N GE . PAGE 12 OF 15 I.T.A. NO. 805/MDS/2011 6 . TH E REVENU E H AD NOT MADE O U T A CA S E T HAT T H E I SS U E I NVO L VE D IN TH E APP EA L B E FOR E T H E T R I B U NA L FA LL S WI THIN THE E XCEPTIONS PRO VI DE D I N T HE C IR C UL AR . 7. I T MAY B E NOTED T H A T T HIS CO UR T CO N SI D E R ED A S IMI L A R I SS U E I N T H E CA S E O F C I T V S . AS S OCIAT E D E L EC TR I C A L AG E N C I ES ( 200 8) 214 CT R ( M A D ) 5 1 8 : (2 00 7 ) 29 5 I T R 4 96 ( M AD) W H E R E IN THI S C OURT H E L D AS FO LL OW S ( P . 5 0 0) : 'WE A R E O F T H E CO N S I D E R E D VIEW T H A T N ONE OF TH E EX C E PTION S S T A T E D I N T H E CIRCU L AR ARE APPL I CABL E TO TH E F AC T S OF T H E PR ESE NT C ASE. T H E C IR C U LA R WAS S T A T E D TO B E I SS U ED BY I N VOK I NG THE STATUTORY P OW ER UND E R S. 1 1 9 O F T H E I T AC T. T H E APPEAL I S FIL E D UND E R SECTION . 2 60 A OF THE IT A C T. I T I S W E L L SE TTL E D PRINC IPL E OF LA W THAT EAC H A N D E V E R Y PR OV I SI ON OF A ST ATUT E H A S T O B E GIV E N TH E S A M E IM P O R TANCE. ON E P R OV I S ION CA NN OT B E E L E V ATE D T O A HI G H E R P E D ES T A L T H AN TH E OTH E R P R OV I S I ON, O F CO UR SE , UNL ESS OR O TH E RW I SE S P ECI F I CA LL Y S T A T E D E ITH E R IN T H E SC H E M E, TH E AC T O R IN TH E P R OV I S I O N I T SE LF TH A T A P A R T I C UL A R P R OV I S ION I S S UB JECT E D TO OR Q U A L IF I ED BY ANY O T HE R P R OV I S ION OR T H E P ROV I S I O N CA N B E GIV E N EFF E CT T O NO T W ITH S TANDING A N YTHING C O NT A I N E D I N A NY OTHE R P R OV I S I O N S BY ASS I GNI N G OV E R R I D IN G E F F E C T . H E NC E, T HE C ONT E NT I ON THAT NOT W I TH S T A ND ING T H E CIRC U LAR, W H I C H W A S I SS U ED UND ER S . 119 OF T H E I T A CT , TH E A PP EA L COULD B E F I L E D B Y T H E REVE NU E U ND ER S. 2 6 0 A H A S PAGE 13 OF 15 I.T.A. NO. 805/MDS/2011 TO BE R E J EC T E D F OR T H E R E A S ON TH AT I F THE CO NT E NTIO N I S A CC E P TE D , O N E O F T HE S E CT I O N S WO ULD B EC OM E V IRTU A LL Y OTIO SE A N D TH AT CA N NO T B E T H E I NT E N TI O N O F TH E L AW MAK E R S . ' 8. THU S, FO LL OWI N G TH E L O NG L I N E OF CA S E LA W R EP ORT ED IN CI T V S . RAJA S T H A N PATR I KA LTD. (2 00 2) 1 7 8 C T R ( RAJ) 4 1 4 : (2 0 0 2 ) 2 58 I T R 3 0 0 ( RAJ ), P . S .T.S . THI RU VIRATHNAM & SO N S ( 2 00 4 ) 1 8 6 C T R ( MAD ) 400 : ( 200 3) 2 6 1 I T R 4 06 ( M AD), T O W H IC H ONE O F US IS A P A RTY (K . RA V I R A J A PA N D I A N J .) , CI T VS . DIG V IJAY S INGH (2 007) 2 13 C T R (M P ) 4 90 : ( 2 007 ) 2 9 2 IT R 3 14 ( MP ) AND C IT V S. C AM CO CO L O U R C O. (2 00 2 ) 173 C T R ( BOM ) 2 5 5 : ( 2 00 2) 2 5 4 I T R 5 6 5 ( 80M ), THI S C OU R T H E LD TH A T TH E UNI FO R M LIN E OF J UDI C I A L OPI NI O N I S T H A T IF T HE T AX E FF EC T I S L ESS THAN WH A T I S ST A T E D IN TH E C IRCUL A R , T H E R E VE NU E N EE D NOT AGITA T E TH E I SS U E O N A PP EA L AND T HAT TH E C IR C U LAR I S BI N DING ON TH E REVE NU E . 6. IN VIEW OF THE ABOVE REFERRED DECISION OF THE JU RISDICTIONAL HIGH COURT, INSTRUCTIONS PRESCRIBING THE MONETARY LIMIT OF TAX EFFECT FOR FILING APPEALS WOULD APPLY FOR ALL PENDING APPEALS AS WELL. WE ARE FORTIFIED IN TAKING THIS VIEW BY THE DECISION OF HO NBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. ABHINASH GUPTA (327 ITR 61). PAGE 14 OF 15 I.T.A. NO. 805/MDS/2011 THERE CONTENTION RAISED BY THE REVENUE IS THAT CIRC ULAR NO.5 OF 2008 DATED 15-05-2008 WAS NOT APPLICABLE TO APPEALS FILE D PRIOR TO THAT DATE. IT WAS HELD BY THEIR LORDSHIPS THAT THE CIRCU LAR WAS APPLICABLE TO APPEALS WHICH WERE PENDING BEFORE THE COURT EITHER FOR ADMISSION OR FOR FINAL DISPOSAL, ON THE DATE OF THE CIRCULAR AND THE SAME WAS BINDING ON THE REVENUE. IN TAKING THIS VIEW, HONBLE P&B HI GH COURT RELIED ON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CA SE OF CIT VS. MADHUKAR K. INAMDAR (318 ITR 141), WHERE ALSO THE S AME ISSUE WAS AGITATED BY THE REVENUE. WE ARE, THEREFORE, OF THE OPINION THAT INSTRUCTION NO.3/2011 DATED 09-02-2011 WOULD ALSO A PPLY FOR PENDING APPEALS BEFORE THIS TRIBUNAL. MONETARY LIMIT FOR FI LING APPEAL BEFORE THIS TRIBUNAL AS PER INSTRUCTION NO.3/2011 DATED 09 -02-2011 IS RS. 3 LAKHS. HERE, AS ALREADY NOTED BY US, THE TAX EFFECT IS LESS THAN RS. 3 LAKHS. THERE IS NO CASE FOR THE REVENUE THAT THIS A PPEAL FELL IN ANY OF THE EXCEPTIONS MENTIONED IN THE CIRCULAR. THEREFORE , THIS APPEAL IS ALSO NOT MAINTAINABLE. SINCE THE APPEALS HAVE BEEN DISMI SSED ON MONETARY LIMITS, BEING LESS THAN STIPULATED TAX EFFECT, WE A RE NOT GOING INTO THE MERITS. 7. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. PAGE 15 OF 15 I.T.A. NO. 805/MDS/2011 PRONOUNCED IN THE COURT ON 25.05.2011. SD/- SD/- (U.B.S. BEDI) ( N.S. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 25 TH MAY, 2011 VL COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE