The ACIT- 1(1), Bhopal V. Shri Usman Khan, Gwalior

ITSSA 89/IND/2013

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0815 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 27-07-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 04-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJIV VARSHNEY
• Keywords: Opportunity of being heard; Audit objection; Retrospective amendment; Question of law; Tax effect
• Section: 260A

Judgement Text

ITA NOS. 89, 90 &O 91/IND/2013 USMAN KHAN 1 IN THE INCOME TAX APPELLATE TRIBUNA L INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER AND SHRI B.C. MEENA, HONBLE ACCOUNTANT MEMBER IT(SS)A NOS. 89, 90 & 91/IND/2013 A.YS.2006-07, 2007-08 & 2009-10 ACIT 1(1) BHOPAL ::: APPELLANT VS USMAN KHAN GWALIOR ::: RESPONDENT APPELLANT BY SHRI RAJIV VARSHNEY RESPONDENT BY NONE DATE OF HEARING 27.7.2015 DATE OF PRONOUNCEMENT 27.7.2015 O R D E R PER SHRI B.C. MEENA, AM THESE APPEALS FILED BY THE REVENUE EMANATE FROM THE COMMON ORDER DATED 31.1.2013 OF THE LEARNED CIT(A ) RAIPUR (C.G.) : CAMP BHOPAL. IN ALL THESE APPEALS THE ITA NOS. 89, 90 &O 91/IND/2013 USMAN KHAN 2 REVENUE HAS TAKEN A COMMON GROUND THAT THE LEARNED CIT(A) HAS ERRED IN NOT FOLLOWING THE PROVISIONS OF SECTION 250(1) OF THE INCOME TAX ACT, 1961 BY NOT GIVING A N OTICE TO THE ASSESSING OFFICER OF THE DATE AND PLACE FOR HEARING OF THE APPEAL. 2. NONE ATTENDED ON BEHALF OF THE ASSESSEE. HOWEVER, WE HAVE HEARD THE LEARNED DR. 3. WE HAVE HEARD REVENUES CONTENTIONS AND GONE THROUGH THE FACTS AND RECORDS OF THE CASE. FROM RECORD WE FIND THAT IN ITA NOS. 89 AND 90/IND/2013 THE TAX EFFE CT IS BELOW THE THRESHOLD LIMIT OF R.4 LACS. LD. DR HAS NO T POINTED OUT ANY REASON WHY SUCH APPEALS SHOULD BE MAINTAINABLE IN VIEW OF BOARD INSTRUCTIONS. HONBLE DE LHI HIGH COURT IN THE CASE OF CIT VS M/S. P. S. JAIN & C O. IN ITA NO.179/1991 DATED 02.08.2010 HAS HELD AS UNDER: ITA NOS. 89, 90 &O 91/IND/2013 USMAN KHAN 3 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. SURESHCHANDRADURGAPRASADKHATOD (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 CONDITI ON IN ITA NOS. 89, 90 &O 91/IND/2013 USMAN KHAN 4 THAT INSTRUCTION ALSO THAT THE SAME WOULD APPLY TO APPE ALS 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. KAVEKAR DECIDED ON 29.7.2011. THE DIVISION BENCH, AFTER CONSIDERING EARLIER INSTRUCTIONS AND VARIOUS DECISIONS OF THE COURTS ON INSTRUCTIONS, RELYING ON THE DECISION IN COMMISSION ER OF INCOME TAX VS. MADHUKAR K. INAMDAR (HUF) REPORTED I N (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. ITA NOS. 89, 90 &O 91/IND/2013 USMAN KHAN 5 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 AFORESAID CIRCULAR. THE CIRCULAR WAS ISSUED IN SUPERSESSION OF ALL EARLIER INSTRUCTIONS ISSUED BY THE BOARD. TH E 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. PARAGRAPH 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 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 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 ITA NOS. 89, 90 &O 91/IND/2013 USMAN KHAN 6 FILED PRIOR TO THE ISSUANCE OF INSTRUCTION AND WHER E SUBSTANTIAL QUESTIONS OF LAW WERE RAISED, WERE 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 THAN R S. 4 LACS NOTWITHSTANDING THE ISSUE BEING OF RECURRING NATURE. RELYING ON THE JUDGEMENT IN CIT V/S POLYCOTT CORPORATION, THE COURT OBSERVED 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 I F THE SAME ISSUE, IN RESPECT OF SAME ASSESSEE, FOR OTHER ASSESSMENT YEARS IS INVOLVED, EVEN THEN THE DEPARTMENT SHOULD NOT FILE APPEAL, IF THE TAX EFFEC T IS LESS THAN RS. 4 LAKHS. IN OTHER WORDS, EVEN IF T HE QUESTION OF LAW IS OF RECURRING NATURE EVEN THEN, T HE 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 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 THE TAX EFFECT IS LESS THAN ITA NOS. 89, 90 &O 91/IND/2013 USMAN KHAN 7 RS. 4 LAKHS; BUT THE SAID CIRCULAR IS NOT APPLICABL E 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. ACCORDINGLY , THE COURT DISMISSED ALL THE APPEALS HAVING A TAX EF FECT 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 INSTRUCTIONS PROVIDES THAT APPEALS SHALL NOT BE FILED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS PRESCRIBED, HENCEFORTH. THE MONETAR Y LIMITS PRESCRIBED FOR FILING AN APPEAL UNDER SECTIO N 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 CIRCUL AR INDICATES THAT MONETARY LIMITS WOULD NOT APPLY TO W RIT MATTERS AND DIRECT TAX MATTERS OTHER THAN INCOME TA X. IT FURTHER PROVIDES THAT WHERE THE TAX EFFECT IS NOT QUANTIFIABLE, THE DEPARTMENT SHOULD TAKE A DECISION TO FILE APPEALS ON MERITS OF EACH CASE. CLAUSE 11, AGA IN PROVIDES THAT THE INSTRUCTION WOULD APPLY TO APPEAL S ITA NOS. 89, 90 &O 91/IND/2013 USMAN KHAN 8 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 WE RE 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 FO UND 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 MARCH 03, 2011, BY RELYING ON ITS EARLIER JUDGEMENT 'COMMISSIONER INCOME TAX DELHI-II I 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 WOU LD 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 DIVISI ON 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 CORPORATI ON ITA NOS. 89, 90 &O 91/IND/2013 USMAN KHAN 9 (SUPRA). THE CONSISTENT VIEW OF THE COURT HAS BEEN THAT THE CBDT INSTRUCTION WOULD APPLY TO PENDING CASES A S 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 N OT MAINTAINABLE IN VIEW OF THE PROVISIONS OF SECTION 2 68A OF THE INCOME TAX, AND THE CBDT INSTRUCTION NO. 3 O F 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 HA S 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 LIMIT, 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 ASSESSEE, ON SIMILAR ISSUE AND IF IT IS ABOVE THE MONETARY LIMIT PRESCRIBED.' ITA NOS. 89, 90 &O 91/IND/2013 USMAN KHAN 10 4. WE FIND FROM THE ABOVE CASE LAW OF HONBLE GUJARAT HIGH COURT IN THE CASE OF SURESH CHANDRA DURGA PRASAD KHATOD (HUF) ( SUPRA ) THAT IN THE SIMILAR SITUATION AND EXACTLY IDENTICAL INSTRUCTIONS WERE APPLIED TO THE APPE ALS FILED RETROSPECTIVELY. HONBLE GUJARAT HIGH COURT HAS DISCUSSED THAT ALMOST ALL HIGH COURTS ARE OF THE UNANIMO US VIEW, CONSIDERING THE MAIN OBJECTIVE OF SUCH INSTRUC TIONS 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 T O RS. 4 LAKH FOR FILING APPEAL BEFORE ITAT ON INCOME TAX MATTER S, AS ISSUED VIDE INSTRUCTION NO.5/2014 F NO 279/MISC.142/2007-ITJ (PT) DATED 10 TH JULY, 2014 WILL APPLY TO PENDING APPEALS ALSO FOR THE REASON THAT THE SAME IS EXACTLY IDENTICAL TO EARLIER INSTRUCTIONS. THE REL EVANT CIRCULAR ISSUED BY CBDT READS AS UNDER: REFERENCE IS INVITED TO BOARDS INSTRUCTION NO 3/2 011 DATED 09/02/2011 WHEREIN MONETARY LIMITS AND OTHER CONDITIONS FOR FILING DEPARTMENTAL APPEALS (IN INCO ME-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 ITA NOS. 89, 90 &O 91/IND/2013 USMAN KHAN 11 FILED ON MERITS BEFORE APPELLATE TRIBUNAL, HIGH COU RTS AND SUPREME COURT KEEPING IN VIEW THE MONETARY LIMI TS AND CONDITIONS SPECIFIED BELOW. 3. HENCEFORTH APPEALS 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 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/- 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 C ASES 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 INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESP ECT OF THE ISSUES AGAINST WHICH APPEAL IS INTENDED TO B E FILED (HEREINAFTER REFERRED TO AS DISPUTED ISSUES ). HOWEVER THE TAX WILL NOT INCLUDE ANY INTEREST THERE ON, EXCEPT WHERE CHARGEABILITY OF INTEREST ITSELF IS IN DISPUTE. ITA NOS. 89, 90 &O 91/IND/2013 USMAN KHAN 12 IN CASE THE CHARGEABILITY OF INTEREST IS THE ISSUE UNDER DISPUTE, THE AMOUNT OF INTEREST SHALL BE THE TAX EF FECT. IN CASES WHERE RETURNED LOSS IS REDUCED OR ASSESSED AS INCOME, THE TAX EFFECT WOULD INCLUDE NOTIONAL TAX O N DISPUTED ADDITIONS. IN CASE OF PENALTY ORDERS, THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDU CED 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 ISSUES IN THE CASE OF EVERY ASSESSEE. IF, IN THE CASE OF AN ASSESSEE, THE DISPUTED ISSUES ARISE IN M ORE THAN ONE ASSESSMENT YEAR, APPEAL, CAN BE FILED IN RESPECT OF SUCH ASSESSMENT YEAR OR YEARS IN WHICH T HE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUES EXCEED S 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 SPEC IFIED IN PARA 3. IN OTHER WORDS, HENCEFORTH, APPEALS CAN BE FILED ONLY WITH REFERENCE TO THE TAX EFFECT IN THE RELEVA NT ASSESSMENT YEAR. HOWEVER, IN CASE OF A COMPOSITE OR DER OF ANY HIGH COURT OR APPELLATE AUTHORITY, WHICH INV OLVES MORE THAN ONE ASSESSMENT YEAR AND COMMON ISSUES IN MORE THAN ONE ASSESSMENT YEAR, APPEAL SHALL BE FILE D IN RESPECT OF ALL SUCH ASSESSMENT YEARS EVEN IF THE T AX EFFECT IS LESS 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 MONET ARY LIMIT PRESCRIBED. IN CASE WHERE A COMPOSITE ORDER / ITA NOS. 89, 90 &O 91/IND/2013 USMAN KHAN 13 JUDGMENT INVOLVES MORE THAN ONE ASSESSEE, EACH 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 BEIN G LESS THAN THE MONETARY LIMIT SPECIFIED ABOVE, THE COMMISSIONER OF INCOME-TAX SHALL SPECIFICALLY RECOR D THAT EVEN THOUGH THE DECISION IS NOT ACCEPTABLE, A PPEAL IS NOT BEING FILED ONLY ON THE CONSIDERATION THAT T HE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN THIS 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 F ILING AN APPEAL AGAINST THE DISPUTED ISSUES IN THE CASE O F THE SAME ASSESSEE FOR ANY OTHER ASSESSMENT YEAR, OR IN THE CASE OF ANY OTHER ASSESSEE FOR THE SAME OR ANY OTHE R ASSESSMENT YEAR, IF THE TAX EFFECT EXCEEDS THE SPEC IFIED 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 G ROUND THAT THE DEPARTMENT HAS IMPLICITLY ACCEPTED THE DEC ISION OF THE TRIBUNAL OR COURT IN THE CASE OF THE ASSESSE E FOR ANY OTHER ASSESSMENT YEAR OR IN THE CASE OF ANY OTH ER 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 ITA NOS. 89, 90 &O 91/IND/2013 USMAN KHAN 14 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 BEIN G LESS THAN THE SPECIFIED MONETARY LIMIT AND, THEREFORE, N O INFERENCE SHOULD BE DRAWN THAT THE DECISIONS RENDER ED THEREIN WERE ACCEPTABLE TO THE DEPARTMENT. ACCORDIN GLY, THEY 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 INSTRUCTI ON MAY HAVE TO BE PRODUCED IN COURTS, THE JUDICIAL FOLDERS IN THE OFFICE OF CSIT MUST BE MAINTAINED IN A SYSTEMIC MAN NER 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 PROVIS IONS OF AN ACT OR RULE ARE UNDER CHALLENGE, OR (B) WHERE BOARDS ORDER, NOTIFICATION, INSTRUCTION OR CIRCULAR HAS BEEN HELD TO BE ILLEGAL OR ULTRA VIRES , OR WHERE REVENUE AUDIT OBJECTION IN THE CASE HAS BEE N ACCEPTED BY THE DEPARTMENT. 9. THE PROPOSAL FOR FILING SPECIAL LEAVE PETITION UN DER ARTICLE 136 OF THE CONSTITUTION BEFORE THE SUPREME COURT ITA NOS. 89, 90 &O 91/IND/2013 USMAN KHAN 15 SHOULD, IN ALL CASES, BE SENT TO THE DIRECTORATE OF INCOME- TAX (LEGAL & RESEARCH), NEW DELHI AND THE DECISION T O FILE SPECIAL LEAVE PETITION SHALL BE IN CONSULTATION WITH THE MINISTRY OF LAW AND JUSTICE. 10. THE MONETARY LIMITS SPECIFIED IN PARA 3 ABOVE S HALL NOT APPLY TO WRIT MATTERS AND DIRECT TAX MATTERS OT HER THAN INCOME TAX. FILING OF APPEALS IN OTHER DIRECT TAX MATTERS SHALL CONTINUE TO BE GOVERNED BY THE RELEVA NT PROVISIONS OF STATUTE & RULES. FURTHER FILING OF AP PEAL IN CASES OF INCOME TAX, WHERE THE TAX EFFECT IS NOT QUANTIFIABLE OR NOT INVOLVED, SUCH AS THE CASE OF REGISTRATION OF TRUSTS OR INSTITUTIONS UNDER SECTIO N 12 A OF THE IT ACT, 1961, SHALL NOT BE GOVERNED BY THE LIMI TS SPECIFIED IN PAR 3 ABOVE AND DECISION TO FILE APPEA L IN SUCH CASES MAY BE TAKEN ON MERITS OF A PARTICULAR C ASE. 11. THIS INSTRUCTION WILL APPLY TO APPEALS FILED ON OR AFTER 10TH JULY, 2014. HOWEVER, THE CASES WHERE APPEALS HAVE BEEN FILED BEFORE 10TH JULY, 2014 WILL BE GOVE RNED BY THE INSTRUCTIONS ON THIS SUBJECT, OPERATIVE AT T HE TIME WHEN SUCH APPEAL WAS FILED. 12. THIS ISSUE UNDER SECTION 268A (1) OF THE INCOME -TAX ACT 1961. ITA NOS. 89, 90 &O 91/IND/2013 USMAN KHAN 16 5. ON QUERY FROM THE BENCH, THE LD. DR COULD NOT PO INT 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 ACCOUNT, (B) THAT 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 ACT OR I.T. RULES 1962 ARE UNDER CHALLENGE, (D) THAT BOARDS 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. THE LD. DR COULD NOT POINT OUT ANY OF THE EXCEPTIONS AS PROVIDED ABOVE. ACCORDINGLY, THESE BEING LOW TAX EF FECT CASES, WE DISMISS THE APPEALS OF THE REVENUE IN LIMINE WITHOUT GOING INTO MERITS. BOTH ITA NOS. 89 AND 90/IND/2013 ARE DISMISSED IN LIMINE ITA NOS. 89, 90 &O 91/IND/2013 USMAN KHAN 17 ITA NO. 90/IND2013 6. IN THIS APPEAL THE REVENUE HAS TAKEN A GROUND THAT THE LEARNED CIT(A) HAS ERRED IN NOT FOLLOWING THE PROVISI ONS OF SECTION 250(1) OF THE INCOME TAX ACT, 1961 BY NOT G IVING A NOTICE TO THE ASSESSING OFFICER OF THE DATE AND PLACE FOR HEARING OF THE APPEAL. 7. AFTER HEARING THE LEARNED DR WE FIND THAT SECTION 250(1) AND (2) OF THE INCOME TAX ACT, 1961 READS AS UN DER :- 250(1) THE COMMISSIONER (APPEALS) SHALL FIX A DAY AND PLACE FOR THE HEARING OF THE APPEAL, AND SHALL GIVE NOTICE OF THE SAME TO THE APPELLANT AND TO THE ASSE SSING OFFICER AGAINST WHOSE ORDER THE APPEAL IS PREFERRED . (2) THE FOLLOWING SHALL HAVE THE RIGHT TO BE HEARD AT THE HEARING OF THE APPEAL ITA NOS. 89, 90 &O 91/IND/2013 USMAN KHAN 18 (A) THE APPELLANT, EITHER IN PERSON OR BY AN AUTHORIZED REPRESENTATIVE. (B) THE ASSESSING OFFICER, EITHER IN PERSON OR BY A REPRESENTATIVE FROM A PLAIN READING OF THIS SECTION IT IS CLEAR THAT TH E LEARNED CIT(A) IS UNDER AN OBLIGATION TO GIVE NOTICE T O THE ASSESSING OFFICER TO INTIMATE THE DATE AND PLACE FOR HE ARING OF THE APPEAL. AS PER THE PROVISIONS OF SECTION 250(2 ) OF THE ACT THE ASSESSING OFFICER WAS HAVING THE RIGHT TO BE HEARD AT THE HEARING OF THE APPEAL. FROM RECORD AVAILABLE BEFOR E US, THERE IS NO EVIDENCE REGARDING THE OPPORTUNITY O F BEING HEARD PROVIDED TO THE ASSESSING OFFICER BY THE LEARNE D CIT(A) WITH REGARD INTIMATION OF THE DATE AND PLACE OF HEARING. THEREFORE, IN THE INTEREST OF JUSTICE AND EQU ITY, THE ISSUES RAISED IN THIS APPEAL ARE RESTORED TO THE FILE O F THE ITA NOS. 89, 90 &O 91/IND/2013 USMAN KHAN 19 LEARNED CIT(A) FOR DECIDING THE SAME AFTER PROVIDING T HE OPPORTUNITY OF BEING HEARD TO THE ASSESSING OFFICER AND THE ASSESSEE. 8. IN THE RESULT, IT(SS)A NOS. 89 AND 90/IND/2013 AR E DISMISSED BEING NOT MAINTAINABLE AND ITA NO.91/IND/2013 IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN OPEN COURT ON 27 TH JULY, 2015 SD SD (D.T. GARASIA) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER 27 TH JULY, 2015 DN/-